Paid ads, local service businesses

Flat fee, percent of spend, or pay per lead: what will ad management really cost?

Four ways agencies charge for running your Google or Meta ads. The fee is only half the question. The other half is what the fee pays the agency to do, because an agency paid a percentage of your spend is paid to grow your spend. The numbers below are arithmetic on stated assumptions, not quotes.

Arithmetic on the assumptions stated below, worked out on October 14, 2026. The flat-fee column links to the page where Spearworks AI publishes its bands. The other columns are illustrative, not quotes from any agency.

	Flat feeBanded by spend	Percent of spendA share of spend	Pay per leadPrice per inquiry	HybridBase plus percent
How the fee is set	A fixed monthly fee, stepped by spend bandThe bands used here: $500 up to $2,000 spend, $800 to $5,000, $1,200 to $10,000. Spearworks AI also charges a one-time $1,200 setup, not shown in the rows below.Spearworks AI ads pricing	A share of what you spend on ads, with a minimumModeled here at 15% with a $500 minimum.	A fee for each lead the ads produceModeled at $30 per lead, with the ads producing one lead per $75 of spend.	A smaller fixed fee plus a share of spendModeled at $400 a month plus 10% of spend.
Fee at $1,000 a month in ad spendSpend goes to Google or Meta. The fee is on top.	$50050% of spend. Expensive at the low end on purpose: Spearworks AI declines spend under $1,000 because campaigns that small cannot gather enough data to optimize.	$500The minimum kicks in. 15% would be $150.	About $40013.3 leads × $30	$500$400 + $100
Fee at $3,000 a month	$80027% of spend	$500The minimum applies again. 15% of $3,000 is $450. Still the cheapest option at this level.	About $1,20040 leads × $30	$700$400 + $300
Fee at $10,000 a month	$1,20012% of spend	$1,50015% of spend	About $4,000133.3 leads × $30	$1,400$400 + $1,000
What the agency is paid to doFollow the money	Lower your cost per leadThe fee does not move with spend, so cutting waste costs the agency nothing.	Grow your spendEvery dollar you cut is a cut to their invoice. Recommending less spend works against them.	Produce more leads, any leadsWho decides what counts as a lead? If the agency does, volume beats quality.	Keep the account, grow it a littleSofter than pure percent, but the percent still rewards spend over results.
If you cut spend in half	Fee drops one band, or stays$3,000 to $1,500: $800 becomes $500.	Fee drops only above the minimum$3,000 to $1,500: $500 stays $500. The floor means no saving.	Fee falls with lead count$3,000 to $1,500: $1,200 becomes $600, if the lead definition is fair.	Fee drops by the percent part only$3,000 to $1,500: $700 becomes $550.
Leaving	Month to month after the first 90 daysThat is the Spearworks AI term. Other flat-fee agencies set their own.	Set by the agencyRead the agreement for the term length.	VariesSome vendors own the phone number and landing page. Check who keeps the assets.	VariesTerm length tends to follow the agency, not the model.
Our takeOpinion	Best fit from about $2,700 to $10,000 a month, where the fee is under 30% of spend and the incentive is clean.	Fine when spend is large and steady and someone on your side audits the account. Watch the minimum.	Only with a written lead definition you control and your own phone number. Otherwise skip.	A reasonable middle if the agency will not do flat fee. Negotiate the percent down and the base up.

Flat fee

Banded by spend

How the fee is set: A fixed monthly fee, stepped by spend bandThe bands used here: $500 up to $2,000 spend, $800 to $5,000, $1,200 to $10,000. Spearworks AI also charges a one-time $1,200 setup, not shown in the rows below.Spearworks AI ads pricing
Fee at $1,000 a month in ad spend: $50050% of spend. Expensive at the low end on purpose: Spearworks AI declines spend under $1,000 because campaigns that small cannot gather enough data to optimize.
Fee at $3,000 a month: $80027% of spend
Fee at $10,000 a month: $1,20012% of spend
What the agency is paid to do: Lower your cost per leadThe fee does not move with spend, so cutting waste costs the agency nothing.
If you cut spend in half: Fee drops one band, or stays$3,000 to $1,500: $800 becomes $500.
Leaving: Month to month after the first 90 daysThat is the Spearworks AI term. Other flat-fee agencies set their own.
Our take: Best fit from about $2,700 to $10,000 a month, where the fee is under 30% of spend and the incentive is clean.

Percent of spend

A share of spend

How the fee is set: A share of what you spend on ads, with a minimumModeled here at 15% with a $500 minimum.
Fee at $1,000 a month in ad spend: $500The minimum kicks in. 15% would be $150.
Fee at $3,000 a month: $500The minimum applies again. 15% of $3,000 is $450. Still the cheapest option at this level.
Fee at $10,000 a month: $1,50015% of spend
What the agency is paid to do: Grow your spendEvery dollar you cut is a cut to their invoice. Recommending less spend works against them.
If you cut spend in half: Fee drops only above the minimum$3,000 to $1,500: $500 stays $500. The floor means no saving.
Leaving: Set by the agencyRead the agreement for the term length.
Our take: Fine when spend is large and steady and someone on your side audits the account. Watch the minimum.

Pay per lead

Price per inquiry

How the fee is set: A fee for each lead the ads produceModeled at $30 per lead, with the ads producing one lead per $75 of spend.
Fee at $1,000 a month in ad spend: About $40013.3 leads × $30
Fee at $3,000 a month: About $1,20040 leads × $30
Fee at $10,000 a month: About $4,000133.3 leads × $30
What the agency is paid to do: Produce more leads, any leadsWho decides what counts as a lead? If the agency does, volume beats quality.
If you cut spend in half: Fee falls with lead count$3,000 to $1,500: $1,200 becomes $600, if the lead definition is fair.
Leaving: VariesSome vendors own the phone number and landing page. Check who keeps the assets.
Our take: Only with a written lead definition you control and your own phone number. Otherwise skip.

Hybrid

Base plus percent

How the fee is set: A smaller fixed fee plus a share of spendModeled at $400 a month plus 10% of spend.
Fee at $1,000 a month in ad spend: $500$400 + $100
Fee at $3,000 a month: $700$400 + $300
Fee at $10,000 a month: $1,400$400 + $1,000
What the agency is paid to do: Keep the account, grow it a littleSofter than pure percent, but the percent still rewards spend over results.
If you cut spend in half: Fee drops by the percent part only$3,000 to $1,500: $700 becomes $550.
Leaving: VariesTerm length tends to follow the agency, not the model.
Our take: A reasonable middle if the agency will not do flat fee. Negotiate the percent down and the base up.

Yes
With conditions
Not yet
Not confirmed

Assumptions used: percent of spend at 15% with a $500 minimum. Pay per lead at $30 per lead on top of spend, with one lead per $75 spent. Hybrid at $400 plus 10%. The flat-fee bands are the ones Spearworks AI charges, so read that column as a disclosure, not a neutral sample. Ad spend itself is paid to the platform on your own card under every model worth signing.

Three questions before you sign any of them

The model matters less than the answers to these. A good agency on a percent model beats a bad one on a flat fee.

01Who owns the account?You should. The ad account, the pixel, the phone number and the landing page stay in your name.
02What is the lead target?A cost per lead agreed in writing before launch. Without it, nobody can say whether the money worked.
03Is conversion tracking live first?If calls and forms are not being counted, the ads are spent blind under every pricing model.

One rule of thumb: if the fee rises when you spend more and nothing else changes, ask what you are buying with the extra.

Spearworks AI

Want the account set up before anyone spends a dollar?

I set up tracking, audiences and campaign structure on accounts you own, then manage them for a flat monthly fee banded to spend. Ad budget goes straight to the platform on your card.

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Nathan Spear · spearworksai.com

Spearworks Labs · All comparisons · Checked October 14, 2026. Not affiliated with any vendor listed.