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Most agencies charge a percentage of your advertising spend, typically between 10 and 20 percent. It is presented as alignment: we only earn more when you invest more. Look at what it actually incentivises and the alignment runs the wrong way.
The maths
Take an account spending 500,000 a month at a 15 percent fee. The agency earns 75,000. Now suppose restructuring the account could deliver the same number of leads on 350,000 of spend. Doing that excellent work reduces the agency fee to 52,500 — a 22,500 pay cut for the person who has to recommend it.
No individual has to behave badly for this to distort advice. It only takes the recommendation to go unmade, quarter after quarter.
Never make efficiency cost your agency money. It is the single easiest conflict of interest to remove from the relationship.
What the incentive produces in practice
What a flat fee changes
We charge a fixed monthly management fee based on account complexity, not on what you spend. Spend goes directly to Google in your own account and we never touch it. If we cut your budget by a third and hold your lead volume, we earn exactly the same, and that is the point.
It also makes the monthly conversation different. The question becomes whether the account is efficient rather than whether it should be bigger.
The fair objection
A flat fee can be poor value on a very small account, where the work is minimal but the fee is fixed. That is true, and we say so during scoping rather than after. Below a certain spend, paid search may not be the right channel at all, and we would rather tell you that than manage a budget too small to compete.
Send us access. We will show you exactly which terms are consuming budget without converting.
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