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- Aug 3, 2012
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Hey Vic,
This is relevant to my interests... thanks for posting.
- If I were to start an agency, managing and optimizing client campaigns, what major challenges should I be prepared for?
- What's a good rule of thumb to charge clients? Is it typically something like 10% of ad spend, or maybe a profit sharing deal?
- Big question I have is billing... are clients willing to prepay/make a deposit for traffic or do they get billed after the fact?
1.Depends on what clients you are going after, big brands will require tons of people to coordinate a pitch, develop a strategy, etc...
On the lower end, local businesses would maybe require a presentation and a few calls. Be prepared for billing issues, the larger the client, the less willing they are to part with their money upfront. Be weary of a prospect or someone who calls you up and wants you to create a proposal...always hold something back otherwise they may just take your strategy and tactics and buy the media themselves.
2.All depends on what you are selling. For search 10% is about average or you can charge less % and offer the client a flat click cost. Although the latter will only work with branding clients. You can offer rev share as well, if you think you can make it work or rev share/low fee. You can offer no fee for display and just collect the margins on the display buy as long as you know the costs going in and quote a flat click cost. Or you can do the rebate scenario I mentioned earlier, where you get a kickback from publishers.
Charge extra for advanced reporting and adserving, the latter can bring in huge margins.
3.Whenever possible try to get paid upfront. At least a retainer fee. Cash flow is your biggest challenge outside of getting new clients. I've seen HUGE brands take 6-9 months to pay after their campaign has run. Some will try to nitpick in order to avoid paying at all, like auditing you, etc...
Last but not least, the relationship with your providers/publishers is actually more important than with your clients. You can always get new clients, but there are only a limited number of publishers you can work with. So even as tempting as it is to get on the phone and bitch them out for screwing up a campaign launch, just be tactful and ask for a make good, then turn around and tell your clients you got them bonus impressions/clicks.