If you own a web business (or website) and is managing your own PPC campaigns without much success, you may want to outsource your paid search campaign management and optimization to some PPC experts. The next step is to determine an appropriate business model that can work for you and your PPC manager(s). Below are some of the business models that you may consider.
#1: Cost-per-action (CPA)
You pay your PPC manager according to per action. An action is usually defined as a conversion which is most likely a sale made on your website via the traffic of the PPC campaign.
This PPC business model is similar to Pay-per-action (PPA) which is provided by Google Adwords on its content network.
#2: Cost-per-lead (CPL)
The cost-per-lead model is similar to cost-per-action except there is usually no payment required by the website visitors. Visitors to the client web site usually are required to submit some information via such as an online form.
The problem with CPL and the online form submission is that it is easy to create fraudulent submissions.
#3: Revenue Share
The revenue share business model may require great amount of trust between the client and the PPC manager. Many PPC search affiliates are willing to use this model.
The problem is that if the client has a fairly new business (or website) which is not yet well-known (or is lack of good brand-awareness), the experienced PPC managers are usually unwilling to work with this client.
#4: Profit Share
Profit share is slightly different to revenue share. With profit share, it also requires great amount of trust in the relationship between both parties. The client will have to reveal not only the actual revenues but also the actual profits. Another benefit of the profit share model can be supported by one of the researches on Vinny Lingham’s blog.
It is difficult for clients who have less known brands to get any real PPC expert to participate, as there is no guarantee of revenue for the work of the PPC expert..
#5: Percentage on Ad Spend
You may consider paying 10% or 20% (or sometimes even more) on ad spend of your campaigns to the PPC experts.
The one problem with this ad spend model is that when you own a website (or product) which will only have limited traffic (due to its business nature). For example, some paid search experts may not want to work with this model as 20% or even 40% of ad spend can be too little profit for them, if they cannot even spend over $1000 per month.
Even when traffic is high, there may not be enough motivation for the PPC manager(s) to continuously focus on optimizing your campaign.
#6: Once-off Setup
If you think setting up a PPC campaign is time-consuming, then obviously when you need your campaign being setup across multiple PPC search engines, your option may be to outsource this tedious task. If you have great knowledge on setting up, managing and optimizing PPC campaigns, your option is to have a PPC amateur setting up the campaign according to your full instructions (or specifications). All you do is to pay a one-time fee to this person.
#7: Consultation by Hours
If you do have one or more PPC managers who are good enough in setting up and managing campaigns, but you are not getting great results after some serious campaign optimization, then you may want to hire a PPC consultant. A really experienced PPC consultant usually can tell you what changes need to be made after quickly reviewing your PPC search engine account(s).
If you are creative enough, sometimes it may be better to combine some of the above business models. For example as a client, you may want to pay a once-off setup fee and then CPA as the ongoing model. You may also combined revenue share with the hourly consultation fee if that suits your requirements. The bottom line is that you want to get the most out of the efforts of your PPC manager(s) and at the same time you want to fairly compensate the experts so that they are fully motivated to manage and optimize your campaigns.
With my experience of previously managing multiple paid search projects, PPC is becoming more competitive in 2007. A campaign that is being setup incorrectly or optimized ineffectively can often cost you a fortune.