80% of SMBs Are Overpaying Their PPC Agency—Are You? Here’s What You Should Actually Pay

As a fractional CMO, I'm tired of seeing small and mid-sized businesses stuck with overpriced, underperforming PPC agencies—so let's get clear on what you should be paying and expecting in terms of results. The answer can vary widely by industry – factors like competition, ad complexity, and compliance can all influence what agencies charge. Below we break down typical PPC agency fee models and expected monthly costs for SMBs in key industries (healthcare, legal, SaaS, e-commerce, and direct-to-consumer) and share performance benchmarks (CPC, CPA, ROAS, CTR) by industry.

We’ll also highlight the key PPC metrics your agency should report and how to evaluate your agency’s performance to know if you’re getting good value or if it might be time to switch. So let's dive in and save you some money!

Common PPC Agency Fee Models and Ranges

Most PPC agencies use one (or a hybrid) of a few standard pricing models:

• Flat Monthly Retainer: A fixed fee per month for management services. Simplicity is the upside – you know your costs – but it may not scale with workload.

• Percentage of Ad Spend: The agency charges a percentage (typically around 10%–20% of your monthly ad budget) as their fee. This aligns costs with your spend level (e.g. 15% of $10k ad spend = $1.5k fee). Many agencies enforce a minimum fee (e.g. $500) so that very low spends are still worth their time.

• Hybrid Fee: A base retainer + percentage of spend. For example, an agency might charge $500 + 10% of ad spend, ensuring their base costs are covered while also scaling with your budget.

• Performance-Based: Less common for SMBs, some agencies offer incentive pricing (e.g. bonuses for hitting lead/sales targets). While attractive (“pay only for results”), pure performance deals are rare due to unpredictable factors. Often a performance bonus is layered onto a base fee instead.

  
  

For small businesses, PPC management fees can start quite low – sometimes $250–$500 per month on the low end, up to a few thousand dollars for more involved campaigns. Mid-sized firms with larger budgets will pay more, especially under percent-of-spend models. Below is a comparison of typical monthly PPC management fees by industry for U.S. SMBs, along with common pricing structures:

Note: These ranges exclude your actual ad spend – they’re the agency’s management fee only. A setup fee (e.g. $500–$2,000 one-time) may also apply for new campaigns. Agencies specializing in highly regulated fields may charge towards the higher end because of the extra work to stay compliant. Very competitive niches (e.g. personal injury law, competitive e-commerce verticals) also see higher fees in general, proportional to the expertise and effort required.

PPC Performance Benchmarks by Industry

Beyond fees, it’s important to understand typical PPC performance metrics for your industry. Key benchmarks include average cost-per-click (CPC), click-through rate (CTR), cost per acquisition (CPA) – also called cost per lead or sale – and return on ad spend (ROAS). These metrics vary by industry based on competition and user behavior. Below is a comparison of Google Ads search benchmarks for SMB-scale campaigns in our focus industries:

Sources: These benchmarks are drawn from recent industry data (2024–2025) analyzing thousands of Google Ads campaigns.

Key PPC KPIs to Track and Expect in Reports

Regardless of industry, your PPC agency should be tracking and reporting key performance indicators (KPIs) that align with your business goals. Expect regular reports (often monthly) with metrics such as:

Clicks & Impressions: Simply reporting the number of clicks and impressions isn't enough. Agencies should be contextualizing these raw metrics. Are your clicks and impressions increasing or decreasing week-over-week (WoW) and month-over-month (MoM)? If impressions are up but clicks are stagnant, your agency should be addressing issues around ad relevance, targeting accuracy, or keyword quality.

Click-Through Rate (CTR): CTR alone won't tell you much without context. Look beyond the percentage itself—how has your CTR changed WoW and MoM? Are your ads becoming more compelling or less effective over time? Agencies should identify your best-performing creative and analyze why it's outperforming others, using those insights to drive improvement.

Cost per Click (CPC): Your CPC should be benchmarked against industry averages and competitors, not just tracked in isolation. Ask your agency how your CPC ranks compared to key competitors and industry standards. Additionally, tracking keyword positions and top-of-page impression share can help pinpoint why CPCs are rising or falling.

Conversions: Conversion numbers need context: How are they trending over time? Are you seeing an increase in efficiency—more conversions from fewer clicks—or the opposite? Agencies should report clearly on which ads, keywords, and landing pages drive the most conversions and suggest actionable steps to enhance performance.

Conversion Rate (CVR): A static CVR metric isn't actionable unless you also see the trends. Has your CVR improved or worsened recently? If your CVR is declining, your agency should immediately evaluate landing page effectiveness, messaging alignment, or audience targeting.

Cost per Acquisition (CPA): Tracking CPA means little unless you compare it regularly to historical performance. Is your CPA decreasing month-over-month? If not, your agency must demonstrate active strategies for efficiency improvements—like refining targeting, bidding strategies, and creative optimizations—to drive CPA down.

Return on Ad Spend (ROAS): ROAS without comparative context isn't insightful. Agencies must track how your ROAS changes over time. Are you achieving a better or worse return compared to previous months? For low ROAS, agencies should clearly articulate if short-term trade-offs (e.g., lifetime value considerations) justify continued investment, or if immediate adjustments are necessary.

Quality and Relevance Metrics: Metrics like impression share and Quality Score are only helpful if you analyze their movement over time. Low top-of-page impression share might signal insufficient budget or bidding inefficiencies. Your agency should actively discuss strategies to optimize Quality Scores and increase impression share to improve overall efficiency and reduce CPC.

In summary, your agency’s reports should focus on results: how many conversions were obtained, at what cost, and what revenue or value resulted. Vanity metrics like raw impressions or clicks without context are not enough. A good PPC agency keeps the focus on ROI and true leads, not just views or clicks and will provide a live dashboard (or more so you can see changes whenever you need them. They will tie campaign metrics back to your goals – for example, emphasizing conversions, CPA and ROAS for a sales-driven campaign (versus impressions or reach for an awareness campaign). They should also provide clear commentary on what the numbers mean and any planned optimizations.

Is Your PPC Agency Delivering Value? When to Consider a Switch

How do you know if your current PPC agency is doing a good job or if it’s time to find a new partner? Here are some telltale signs that an agency might not be delivering value:

• Lack of Meaningful Growth: PPC should drive improvement in your key goals (more leads, more sales, improving ROAS) over time. It’s a red flag if after several months you’re not seeing any growth in conversions or return on ad spend despite consistent spend. An effective agency will optimize and tune campaigns to find incremental gains. If performance is stagnant or declining with no clear explanation, it may indicate poor management.

  
  

• Focus on Vanity Metrics: Be cautious if the agency mainly reports metrics like impressions, clicks, or click-through rates without tying them to conversions or ROI. For instance, boasting about “thousands of views” means little if those visits aren’t converting. Agencies that can’t demonstrate tangible business outcomes may not be hitting the mark.

  
  

• Poor Transparency: A trustworthy agency gives you access to your ad accounts and openly shares data and strategy. If your agency withholds account access or hides certain metrics, that’s a serious concern. You should be the owner of your Google Ads account, not the agency – lack of transparency could mean they’re obscuring poor performance or simply not collaborating well.

  
  

• Irregular Reporting & Communication: You should be receiving regular reports (at least monthly) and candid insights from your PPC team. If you realize “Hey, I haven’t seen a report in months,” or the agency is hard to reach and doesn’t proactively discuss strategy, it shows inattentiveness. Consistent, clear communication is essential in a client-agency relationship.

  
  

• Strategy Stagnation: Good agencies continuously test and tweak – new ad creatives, fresh keywords, negative keywords to cut waste, bid adjustments, etc. If your campaigns have been on “set it and forget it” mode, with the agency making few changes or suggestions, you’re likely leaving money on the table. An engaged agency will regularly propose ideas to improve results (and explain the rationale).

  
  

• Misaligned Success Metrics: Ensure the agency understands your business goals. If they keep celebrating metrics you don’t ultimately care about (like traffic volume when you asked for lead volume), there’s a disconnect. Both parties should agree on what success looks like (e.g. a target CPA or ROAS) and work towards it. If your agency “thinks everything is great” but you’re not seeing business impact, it’s time for a frank discussion or a new partner.

  
  

In short, you’re paying for expertise and results. A great PPC agency will be transparent, responsive, and oriented on ROI – they’ll treat your ad spend as an investment to be maximized, not just a budget to burn. If you’re consistently not getting a positive return or the service you expected, don’t hesitate to explore other options. The right agency should function like an extension of your team, committed to your growth. As one report put it: no one wants to stick with an agency that isn’t making them money. By monitoring the right KPIs and holding your PPC partner accountable, you can ensure you’re getting the value you deserve – and make a switch if not.

Not Getting the PPC Results You Deserve?

As an Expert-Vetted (top 1%) Fractional CMO, I've helped businesses across healthcare, SaaS, legal services, e-commerce, and direct-to-consumer brands significantly boost their PPC ROI. My clients regularly achieve reductions in CPA, dramatic increases in conversions, and industry-leading ROAS—because I don't just manage ad spend, I turn it into real growth.

If you're ready for transparent, responsive, and genuinely results-oriented PPC management, it's time to explore what Orr Consulting can do for you.

Schedule Your PPC Audit Today!