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What are some standard fees for consulting/agencies?

Follower ✭ ☆ ☆
# 1
Follower ✭ ☆ ☆

I've been asked to do some on-the-side consulting for a few people.  No idea what to charge.  What are some industry standard business models that consultants or agencies use?

 

Thanks, SS

1 Expert replyverified_user

Re: What are some standard fees for consulting/agencies?

Visitor ✭ ✭ ✭
# 2
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Hi Sem-Sam,

 

If you're referring to a consultancy in paid advertising, you've one of 2 scenarios, either to get paid 20% of the amount being spent on advertising by the agency (unless it's a company that spends a fortune on online advertising) or you can get a fixed fee, if it's part time consultancy for online campaigns they do have then anywhere between $500 to $800 a month is fair enough.

 

Again, keep in mind that it depends on the size of the company you'll be a consultant for, the numbers I stated mostly refer to mid sized companies.

 

Regards,

Re: What are some standard fees for consulting/agencies?

Participant ✭ ✭ ☆
# 3
Participant ✭ ✭ ☆
Often people agree to a certain dollar per hour, or a percent of spend. A lot of times if a percent of spend is in place, there is a minimum. So for instance, you might suggest a 10% of spend contract with a minimum monthly fee of _______, so that if media spend lowers significantly, you will still make enough money to make it worth your while.

Hope this helps!

Re: What are some standard fees for consulting/agencies?

Follower ✭ ☆ ☆
# 4
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Great, thanks!

Re: What are some standard fees for consulting/agencies?

Top Contributor
# 5
Top Contributor

Hi SEM_SAM,

 

Do make sure you have a minimum fee in place as Amy suggests.  More than once I've taken on clients with significant spend where a percentage of spend was a fair and reasonable payment, only for my own efforts to substantially reduce their (wasted) spend leaving my company with less money!

 

I'd also lean more towards 10% than 20% - 20% is an awfully big chunk of spend when budgets get anywhere reasonable and I'd struggle to justify this in terms of hours worked on an Account.

 

Jon

AdWords Top Contributor Google+ Profile | Partner Profile | AdWords Audits

Re: What are some standard fees for consulting/agencies?

Participant ✭ ✭ ✭
# 6
Participant ✭ ✭ ✭
Hi SEM_SAM

You have got some great answers here, So i'll just add a bit of what I have seen. I agree with Amy about the minimum spend (it is what I myself do), but as far as percentages go, there will be varying amounts. I have seen companies charge as much as 22% and as little as 6%. Personally I prefer the model that adopts a fluid stance. So generically charge 12-15% and then have a model in place that reduces the percentage charged dependant on amount spent.

At the end of the day a doubling an accounts spend does not double the work but there is a minimum amount of work required irrespective of budget size. For this reason I like to have a minimum and tend to start at a higher percentage. It ensures that a client is profitable (for you in terms of hours worked) as soon as possible and then as budget increases you can decrease the percentage.
This has the added advantage of making the client happy as their 'costs' are reduced.

Hope this helps.