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Risk & Reward
Performance Billing Model for Managed Service
Most Paid Search agencies bill based on a percentage of ad spend. If you’re not a Paid Search expert, this seems like an easy option. You don’t have to calculate an hourly rate or worry about agencies than inflate their hourly billings. The problem with this model is that it doesn’t incentivise the agency to lower your CPA and remove wasteful ad spend. If you’re not a Paid Search guru, it can be hard to tell if your agency is spending your money in the optimal way.
When we developed Segmatic’s billing model, we thought back to our in-house days and our experience of working with outside agencies that make big promises but produce disappointing results. We decided that the fairest billing model is one where our incentives in perfect alignment with yours.
With our model, we only succeed when you do. Segmatic gives you all the trust of an in-house staff, with the convenience and price of an outside agency.
How do we do it?
We know you want to decrease your CPA and bring down your total brand spend. We align our goals with yours by charging 11% of any decrease in CPC from an agreed baseline number. That’s it. If we lower your CPC by €2, we make only 22 cent per conversion, and no more.
We also bill brand and non-brand campaigns differently. Brand campaigns are much easier to get right and make quick wins, so we charge less for them. For non-brand, you want to increase the number of conversions you’re getting at your target CPC, so we charge only 11% of your CPA. So we make more when you sell more. To further encourage us to spend ad money wisely, we break your products into several categories and bill differently for each of them.
With Segmatic, we win when you win, so you can’t lose. Contact us to learn more, and add us to your team.
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