What you need to know before you hire.

In the world of digital marketing, Meta/Facebook ads are the reigning champion for e-commerce businesses. Whether you're a seasoned advertiser or just dipping your toes into the world of paid social, the question of agency pricing is always top of mind. With so many options out there, how do you know if you're getting a good deal, or worse, getting ripped off? Let's break down the different types of payment structures that Facebook ads agencies use so you can make an informed decision.

1. The Flat Fee Structure: Simple & Straightforward

If you're someone who likes predictability, the flat fee structure might be your best bet. With this model, you pay a fixed amount each month, regardless of the results. It’s like a subscription service for your Facebook ads. This pricing is typically best for businesses that have a clear, consistent monthly ad spend and want to avoid the surprises of fluctuating costs.

Pros:

• Predictability: You know exactly how much you'll be paying each month.

• Budget-Friendly: It’s easier to budget for the cost.

Cons:

• No Performance Incentive: The agency gets paid the same, no matter how well your ads perform.

• May Not Be Ideal for Scaling: If your ad spend increases significantly, you might end up overpaying for the service.

2. Percentage of Ad Spend: Aligned with Your Goals

Many agencies opt for a percentage of ad spend model, where their fee is tied directly to the amount you spend on ads. For instance, if you're spending $10,000 a month on Facebook ads, and the agency charges 10%, you'd pay them $1,000.

This model aligns the agency’s goals with yours—more ad spend typically means more results, which means the agency is motivated to help you scale.

Pros:

• Performance-Driven: The agency is incentivized to help you increase your ad spend by delivering results.

• Scalable: As your ad spend grows, the agency's compensation grows too, which usually means they’ll put more effort into your campaigns.

Cons:

• Costs Can Add Up: As your ad spend increases, so do your costs.

• Not Ideal for Small Budgets: If your budget is on the lower side, this model can sometimes lead to high costs relative to your ad spend.

3. The Hybrid Model: The Best of Both Worlds?

The hybrid model combines a flat fee with a percentage of ad spend. For example, you might pay a base fee of $1,000 per month plus 5% of your ad spend. This model aims to balance the predictability of a flat fee with the performance incentive of a percentage-based model.

Pros:

• Balanced Approach: You get the predictability of a flat fee with the performance incentive of a percentage-based fee.

• Flexibility: It can be tailored to suit different budgets and business goals.

Cons:

• Complexity: It can be harder to understand and manage than a straightforward flat fee or percentage model.

• Potentially Higher Costs: Depending on your ad spend, this model can sometimes result in higher fees compared to other structures.

4. Performance-Based Pricing: Paying for Results

In a performance-based model, the agency’s fee is directly tied to the results they deliver. This could be in the form of a commission on sales generated through Facebook ads or a bonus for hitting specific KPIs (Key Performance Indicators).

This model is often used by agencies confident in their ability to drive results and is typically suited to businesses with clear, trackable goals like sales or leads.

Pros:

• High Motivation: The agency is highly motivated to deliver results since their compensation depends on it.

• Lower Risk: You pay primarily for results, making it a low-risk option for your business.

Cons:

• Complex Tracking: It requires robust tracking and attribution to ensure accurate payment.

• Higher Fees for Success: If the campaign is wildly successful, you might end up paying more than with other models.

5. Hourly Rate: Paying for Time

Some agencies charge by the hour, much like freelancers or consultants. This is less common for full-service Facebook ads management but might be used for specific tasks, such as ad creative design or strategy consultation.

Pros:

• Transparency: You pay for the actual time spent on your account.

• Flexibility: It’s a good option if you only need help with specific aspects of your Facebook ads.

Cons:

• Unpredictable Costs: It can be hard to budget if you’re unsure how much time the agency will need.

• Less Focus on Results: This model focuses more on time spent than on results delivered.

  How We Charge: Transparent & Performance-Focused

  At That British Chick Agency, we believe in aligning our success with yours. That's why we use a hybrid pricing model that combines a flat rate with a percentage of ad spend, ensuring that you get the best of both worlds: predictability and performance-driven incentives.

  But we don’t stop there. To build a partnership we also incorporate a performance bonus—a dollar amount per unit sold. This means that our team is constantly focused on optimizing your campaigns for the best possible outcomes, knowing that our success is directly tied to yours.

  Which Pricing Model is Right for You?

  The best pricing model for your business depends on your budget, goals, and risk tolerance. If you want predictability, a flat fee or hybrid model might be best. If you're willing to pay for performance, then a percentage of ad spend or performance-based model could be the way to go. Just remember to align your choice with your business objectives and ensure that the agency you choose is transparent about their fees and the services they provide.

  Receive a Free Facebook Campaign Review with Consultation

  Ready to dive into Facebook ads but unsure where to start? Or maybe you’re already running ads and want to optimize your performance. Whatever your situation, we’re offering a Free Facebook Ads Campaign Review with Consultation. We’ll review one campaign and provide actionable suggestions to help you get the most out of your ad spend.