What should be the terms when a commission-based marketingcontract ends?
May 28, 2020 12:04 PM Subscribe
We're about to hire someone who's very experienced, and will be working with us basically (after a small initial fee) on commission. It's in the realm of Google Ads and SEO, so any work he does during his time with us should continue to provide benefits for years to come. So, how long should he continue to get his commission, after he leaves us (or we fire him)?
1. He’s an experienced Google Ads / SEO person, who used to be a director at Expedia. I’m guessing he’s used to £120,000/year or more. That's 10x our annual budget (we're a tiny non profit). We agreed to pay him a £500 initial fee — insanely low for his pay grade. It’s more of a goodwill thing. After that, he’s only getting paid via commission (25 to 50 percent, depending on how much extra we earn from his activity).
2. It sounds completely insane, but we have a “Google Ads grant”, meaning we have $10,000 per month of free google ads to play with. However, the ads we run at the moment are currently only generating about $90 per month in revenue. He thinks he could bump that up to anywhere between $3,000/month and $10,000/month.
3. As we’re talking about improving our ads and content, the benefits from his work this month will extend to every subsequent month. In other words, if he increases our revenue to $3,000 next month, we should expect to get roughly $3,000 every month after that, unless Google (or one of the other linked websites) changes their policies.
So, how long should he continue to see commission from his work, after he quits? Should commission stop immediately, or continue indefinitely?
I suggested to him that after our contract ends, he should get commission for 6 months, but at a much lower rate (10%). He suggested he gets commission for a full 12 months at the full rate (25-50%)
Is there a “normal” or “industry standard” in this kind of scenario? Google is completely failing me here!
1. He’s an experienced Google Ads / SEO person, who used to be a director at Expedia. I’m guessing he’s used to £120,000/year or more. That's 10x our annual budget (we're a tiny non profit). We agreed to pay him a £500 initial fee — insanely low for his pay grade. It’s more of a goodwill thing. After that, he’s only getting paid via commission (25 to 50 percent, depending on how much extra we earn from his activity).
2. It sounds completely insane, but we have a “Google Ads grant”, meaning we have $10,000 per month of free google ads to play with. However, the ads we run at the moment are currently only generating about $90 per month in revenue. He thinks he could bump that up to anywhere between $3,000/month and $10,000/month.
3. As we’re talking about improving our ads and content, the benefits from his work this month will extend to every subsequent month. In other words, if he increases our revenue to $3,000 next month, we should expect to get roughly $3,000 every month after that, unless Google (or one of the other linked websites) changes their policies.
So, how long should he continue to see commission from his work, after he quits? Should commission stop immediately, or continue indefinitely?
I suggested to him that after our contract ends, he should get commission for 6 months, but at a much lower rate (10%). He suggested he gets commission for a full 12 months at the full rate (25-50%)
Is there a “normal” or “industry standard” in this kind of scenario? Google is completely failing me here!
What is your profit margin on that incremental revenue? Can you even afford to pay 25-50% of that revenue? If your annual budget is $15k, and then suddenly it jumps to, say, 135k but you're paying out 50k of it to this guy who no longer works there, how is that going to look to your other donors?
Also, him being an ex-director is a bad sign, not a good one - directors don't do hands-on work of this kind and while they may be strategically savvy, you're looking for some immediate tactical help. Further, if he was really making $150k/year before, it's weird he's dickering about $25-50k now - it's too large a number to make this really a charitable donation on his part, but it's too small for this to be a serious job for him.
This seems like a messy situation and you don't sound like you are sufficiently experienced in the area to evaluate the guy's contributions properly, so I think it's a mistake to make any kind of long-term deal. If you're really set on him, maybe propose he spend a couple days and give you a couple suggestions and you pay him $500 flat and see if those suggestions are helpful enough to want to do something more.
posted by inkyz at 5:45 PM on May 28, 2020 [1 favorite]
Also, him being an ex-director is a bad sign, not a good one - directors don't do hands-on work of this kind and while they may be strategically savvy, you're looking for some immediate tactical help. Further, if he was really making $150k/year before, it's weird he's dickering about $25-50k now - it's too large a number to make this really a charitable donation on his part, but it's too small for this to be a serious job for him.
This seems like a messy situation and you don't sound like you are sufficiently experienced in the area to evaluate the guy's contributions properly, so I think it's a mistake to make any kind of long-term deal. If you're really set on him, maybe propose he spend a couple days and give you a couple suggestions and you pay him $500 flat and see if those suggestions are helpful enough to want to do something more.
posted by inkyz at 5:45 PM on May 28, 2020 [1 favorite]
I'm in the industry and haven't heard of commission-based SEO. I'd go with someone who can optimise your PPC/SEO to hit those targets, then train your team to do maintenance. In a year, get them back in for more consultancy (search behaviour isn't steady and reliable, and neither is the Google algorithm). But if you're locked into this guy, make sure training is part of the deal.
posted by Gin and Broadband at 2:13 AM on May 29, 2020 [1 favorite]
posted by Gin and Broadband at 2:13 AM on May 29, 2020 [1 favorite]
« Older What windows app could this be? Do you recognize... | Underrated lakes/towns for a lake house in... Newer »
This thread is closed to new comments.
What you described (spending $10,000 and only making $90) sounds like the first category of big obvious problems. If he thinks he can grow that $90 to $3000-$10000, he must think there are huge glaring problems with your current setup. Perhaps your target CPC is too high. Perhaps you're using the wrong keywords. These are things that can be tested / fixed with a couple hours of work.
With big obvious problems, anyone with some experience in ads/SEO should be able to solve those problems. It doesn't take a huge amount of experience to see big obvious problems.
I think you should be able to hire a less-experienced person for much lower compensation. Even if you paid a less-experienced consultant £500 total, there would probably be big problems staring them in the face, which they can tweak and immediately get you better results.
Paying this guy 25% to 50% of your revenues after he's no longer working with you is unreasonable.
posted by sandwich at 3:51 PM on May 28, 2020 [2 favorites]