Ad spend is the money you pay the ad platform (like Google Ads, Microsoft Ads, or Meta) to show your ads, while management fees are what you pay a PPC agency to set up, run, and improve the campaigns.
Think of ad spend as the fuel and management fees as the labor and expertise. Ad spend flows to the platform and is tracked inside the ad account as “cost” or “spend.” Management fees are a separate business expense paid to the agency for work like keyword and audience research, campaign builds, ad copy and creative testing, bid and budget control, conversion tracking, landing page feedback, and reporting.
In a clean setup, you own the ad account and you pay the platform directly with your card, then the agency invoices you separately for their work. That structure keeps billing simple, makes it easier to audit results, and makes it easier to switch vendors without losing history.
How PPC agencies charge
| Pricing model | How it’s billed | Common fit | What to watch for |
|---|---|---|---|
| Flat monthly fee (retainer) | A fixed monthly fee for ongoing management, sometimes with a minimum term. | Most local service businesses that want predictable monthly costs. | What’s included (search, performance max, remarketing, landing pages, tracking, call reporting) and what triggers extra charges. |
| Percentage of ad spend | A percent of monthly platform spend (often used with minimum and maximum caps). | Budgets that may scale up and down month to month. | It can reward higher spend even when spend is not the right move, ask for a cap or a hybrid model. |
| Hybrid (base fee + percent) | A lower base fee plus a smaller percentage of spend. | Accounts that need steady work plus flexibility as budgets change. | Confirm the percent is based on actual platform spend, not “budget” or an inflated number. |
| Hourly | You pay for time worked, sometimes with a monthly range or a “not to exceed” limit. | One-time cleanup, audits, or short-term help on a specific problem. | Ask what work is planned each month and how many hours are realistic for your account size. |
| Setup fee (one-time) + monthly management | A one-time build fee for initial research, tracking, and launch, then a monthly fee to run it. | New accounts, rebuilds, or businesses that need proper conversion tracking. | Make sure you keep ownership of the ad account, tracking, and landing page assets. |
| Performance-based (lead or sale fee) | Fees tied to a defined result, usually with strict tracking and lead qualification rules. | Businesses with strong tracking and clear definitions of a qualified lead. | Lead quality disputes, spam leads, and attribution problems, get definitions in writing. |
What your invoice should look like
We like invoices that separate costs clearly: one line for platform ad spend (what Google or Meta charged) and one line for the agency’s management fee. If an agency “bundles” spend and fees into one number, ask for a breakdown. Google expects third-party providers to disclose management fees separately from Google Ads costs, so a clear separation is normal and reasonable.
Also ask who is the “billing owner” of the ad account. If you are paying the platform directly, you should have billing access and admin access. If the agency is paying on your behalf (a pass-through model), ask how they reconcile charges, whether there is any markup or processing surcharge, and how quickly you can take billing over if you choose to.
Why pricing varies so much
Management fees change with workload, not just spend. A $3,000 per month campaign can be simple (one service, one location, clean tracking), or it can be complex (multiple locations, call tracking, offline conversion imports, strict compliance rules for healthcare, and lots of landing pages). In Orlando and Central Florida, we also see strong competition in categories like dental, legal, pest control, and home services, which usually means more testing and tighter tracking to keep lead costs under control.
If you want a quick checklist for vetting proposals, our guide on hiring a PPC agency lays out what to ask before you sign anything.
Quick way to compare two agency quotes
When you compare pricing, compare what you get, not just the number. Ask for: (1) what channels are included (search, local service ads if applicable, display, remarketing, paid social), (2) what conversion tracking is included, (3) how often tests and optimizations happen, and (4) what reporting you receive each month. If you’re deciding whether to run ads internally or hire help, this PPC DIY vs agency breakdown can help you sanity-check the tradeoffs.
If you want us to map a fee structure to your budget and goals, our PPC services page explains what we handle and how we keep ad spend and fees cleanly separated so you always know where every dollar went.
