The In's and Out's of Pay Per Click Management Contracts.

The excerpt below is taken from the free white paper "12 Questions You Should Ask a PPC Management Company Before You Hire Them!".

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Question # 8 - What are the terms of your contract? What happens if I’m not happy?

Depending on the PPC company that you choose to work with, there will be some kind of contract you need to sign. Whether it’s a month-to-month or a longer-term contract, you will almost certainly have to sign one. For most people, getting into a month-to-month relationship is the most attractive — there seems to be less risk because you can “stop at any time”. The problem with month-to-month contracts (especially initially) is your PPC company is also very aware of the fact that you can stop at any time and many clients often do end their relationships shortly after they begin. Because of this, when a PPC company puts you in a month-to-month contract, the amount they will invest in your success in any given month will be limited.

Because they measure their resources, your results will probably take longer to appear. The reason is, from a viability standpoint, a PPC management company who has a client on a month-to-month contract simply can’t afford to invest too much time in that account on the front end (when time and effort are typically needed most either to overhaul an existing account or to set up a new account). So, in the month-to-month situation, things tend to move slower than they really need to. Or, in a worst case scenario, the PPC management company performs a superficial amount of work initially and then never really goes much deeper, hoping that you will be pleased with the result and will continue to pay them to manage your account month-to-month.

On the other hand, signing a longer term contract can be tricky as well. If you have a larger account and are working with a more established company, they may want you to make a six or twelve month commitment. The plus side of making this kind of commitment is that the PPC company knows that you are not going anywhere for awhile so they can more freely invest resources on the front end without the fear that you will disappear and leave them holding the bag for a lot of invested labor. On the other hand this is a much greater risk for you as a client. The last thing in the world you want is to get into a long-term binding relationship where you are stuck paying a bill for mediocre to no results.

A good way to protect yourself and still get the necessary initial resources is to enter into a longer-term contract but make sure it contains a fair “early out” clause. This can be the best of both worlds for you and the management company. It allows the management company to invest the necessary up-front resources to ensure that your account is as successful as it can be each step of the way and, at the same time allows you to limit your risk.