This article was first published in displayadsdeepdive.com
For a while now we’ve been discussing the many aspects to consider before hiring a PPC, and the paths to go down whenever figuring out which will be the perfect employee for us, and even how to find it. All of these are fundamental things to think about in the pre-hiring process, so we believe you are quite ready to go out and meet the world (not to hint at any particular world-meeting show) on your own.
So let’s say you already know (because you were a very bright student of ours) which will be the best choice for your PPC Specialist, what do you need from them and where you are going to find them. And you had the interview! It went great, you found your perfect PPC match! So they asked a very fair question whose answer they need in order to go further with your company: Which will the payment method be?
Well, that’s why we are here today. Not to debate on paying cash or credit card, but whether it’s more convenient for you to pay your PPC a prefixed amount every month plus a percentage of the Ad Spend, or hire someone through a Performance Model. Of course, these three possibilities have their own pros and cons, and today we’ll be reviewing them deeply, in order to figure out in which cases they happen to be the best and worst choices to make. So let’s start with a quick explanation and review of both, shall we?
The Prefix + Percentage of Ad Spend Model
In regular jobs, you have a prefixed amount per hour or month, and you get paid pretty much the same amount at the end of the month, or week, or whatever your employer decides. Because regular jobs tend to maintain their routine and stay the same, this makes complete sense. You do the same every week, and you get paid the same every week. Sounds fair, right?
However, for jobs in the Advertising Industry, things can be a little bit different, and that’s why the “normal model” will almost always include a percentage of the Ad spend. Since what happens is that the more Ads you launch, the more revenue you get, the more money you have to keep launching Ads. So, what does this have to do with your payment method? Easy, the larger your Ad spend is the more work, time, and responsibilities your PPC will have. So to make things fair, the payment should always include a percentage of the Ad Spend, just to make sure that their responsibilities are being correctly rewarded.
Do you remember when we talked about using a PPC as an affiliate? Well, the performance model happens to have a lot of similarities with that because you will also be paying your PPC by the results they get for your company. So the more effective their campaigns are the more money that your PPC will be making. However, there’s a big difference between this and the affiliate model, and it consists in the fact that affiliates are solo-workers, they pay for their budgets and they manage their work. Performance PPCs are just as part of your team as any other employee, meaning you are aware of what they are doing and usually you are in charge of the Ad budget.
So the Performance Model shares a lot of the same pros and cons that the Affiliates Model has. Same instability problem for your PPC, same guarantee that your PPC will try to create the best possible Ad Campaign because their salary is completely dependent on it. One difference here would be if the case is you are in charge of the budget, which you are not in the affiliate program. If this is your case, then you must be aware of the risk you are taking, because even if your PPC earns their salary on “commission”, you will still be investing in what takes them to create and launch the Ads.
Another important aspect to consider comes along when your account starts to grow. Let’s say you have an amazing PPC, and they charge 10% of the revenue you make. Even if it will always be the same percentage, while your revenue tends to be small, you will be paying a normal PPC salary. But when your account starts to get bigger, and you start to get very large revenues, then that 10% they charge will probably happen to be a very expensive price to pay, and you’ll realize that you could hire a PPC for a lot less than what he’s charging you. And here’s the big conflict: Should you keep this guy who brought your account to the size that it currently has? Or should you hire a brand new one that has never worked your account but will charge less? Would it be wrong to reduce the percentage of revenue they get paid? All of these are very valid questions that you’ll probably have if you face this situation.
So now that we’ve gotten the explanations out of the way, I’ll let you in on my opinion for this particular case. Basically, the circumstances lead to pretty much one solution. If you have a small company that is not planning on growing that much (maybe your business is a cash cow, and that’s perfect) and is satisfied with their amount of revenue or would like to get some more (but not too much), then you should go ahead and hire someone through a Performance Model. This will assure you that they will be definitely interested in your campaign’s success, you won’t be risking too much, and you will pay them a normal PPC salary that they’ll be literally earning themselves.
However, if you happen to be looking for huge growth and increasing your revenue a lot, then you should definitely hire a PPC that’s paid on the Normal Method. This will assure stability and fair treatment (if your revenue gets larger and you spend more on Ads, you’ll pay them more for their work) for them, and the guarantee that you’ll be paying your PPC a regular salary and not a crazy expensive one.
So the bottom line here comes down to this: What’s your expected/desired growth? Once you’ve figured this out, then you’ll be more than ready to choose the more convenient payment method both for you and for your PPC. And hopefully, this article’s helped to bring you a little closer to that answer.