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Pricing

The math of performance-based agency pricing.

What 35% of attributed sales costs you — worked numbers at three price points, next to what the same money buys in-house or from a flat fee agency.

6 minute read

What's wrong with how agencies charge today.

Most digital marketing agency pricing is a holdover from the 1990s, when "the agency" was a creative shop that produced ads for offline media. You paid a retainer for the team's time and a percentage on top of media spend. The model rewarded billable hours and budget growth. It still does.

The dysfunction is that retainer pricing pays the same whether the campaigns generate revenue or not. Pricing as a percentage of media spend actively incentivizes the agency to spend more, not better. And the agencies that wave "performance" in their marketing typically mean a small bonus on top of a retainer, with the retainer doing the actual work of paying their bills.

For a software founder running 12 months of cash, this is a problem. You can't afford to pay an agency to be busy. You can afford to pay an agency to grow you.

The whole model.

We fund your Google Ads. We take 35% of every attributed sale our campaigns drive. We bill monthly against the conversions Google Ads reports. If we don't generate a sale, you owe us nothing.

One customer, worked through.

A customer signs up for one of your subscription products at $1,000 per month — a $12K annual subscription. One of our campaigns was part of their path to purchase, so the sale is attributed.

What happens Amount
Customer pays you, monthly$1,000
Our fee, monthly (35%)$350
You keep, monthly$650
Google Ads bill for that customer$0 (we cover it)

For a single purchase, it's one transaction. For subscriptions, the same share applies to ongoing payments per the agreement.

The same math at three price points.

Each row is one attributed sale — a monthly payment on a smaller, mid-sized, and larger annual subscription.

Sale value You keep We invoice
$500 ($6K annual subscription, monthly equivalent)$325$175
$2,000 ($24K annual subscription, monthly equivalent)$1,300$700
$4,000 ($48K annual subscription, monthly equivalent)$2,600$1,400

"Isn't 35% high?" Put it next to the alternatives.

It's a fair question. Here's the same money spent three other ways.

Alternative 1: hire a Head of Growth.

A midlevel Head of Growth at a SaaS doing $1–5M in annual recurring revenue (ARR), in 2026, runs $150K base plus $30K bonus plus around 25% benefits load — call it $225K all-in, conservatively. They don't fund your ad spend out of their pocket; that comes out of your operating account. Add tooling (HubSpot, attribution software, dashboards) at another $30K and you're at roughly $255K of fixed annual cost before a single dollar of ad spend.

To match $255K of our fee at 35%, our campaigns need to drive $729K of attributed sales in a year. At that point you're paying the same as a Head of Growth — except we're also funding the ad spend, which is real money that doesn't leave your account.

Below that revenue scale, we're materially cheaper. Above it, we're roughly equivalent on raw fee but still cheaper on total cash outlay because we cover the ad spend. You also keep optionality: 30 days written notice and a complete export of the campaigns if you want to wind us down. Winding down a Head of Growth hire is months of process and severance.

Alternative 2: hire a flat fee Google Ads agency.

A competent flat fee agency runs $3–7K per month — call it $60K per year — plus a 10–15% media management percentage on top of your Google Ads spend. You fund the ads from your account. If they spend $10K of your money on Google per month, that's another $120K of cash out, plus $12–18K in management percentage.

Total annual cost to you: roughly $192–198K of cash, regardless of outcome. If they deliver $1M of new ARR, the math looks good. If they deliver $200K, you've paid them most of the value they generated. The flat fee model puts the performance risk entirely on you.

Our model inverts that. The headline percentage looks higher, but the model only charges when sales happen, and we eat the ad spend exposure. If a month is bad, you owe us nothing. If a month is great, we both win — and the math at any meaningful scale is comparable to flat fee total cost, with the working capital risk shifted to us.

Alternative 3: do it yourself.

You're already doing this. You hate it. Six to eight hours a week go into Google Ads instead of the product or hiring, and the campaigns convert at a fraction of what they should. Price your time at the value you'd otherwise create with it, and DIY costs more than any of the alternatives. Paid acquisition run by the founder at $1–5M ARR almost always underperforms against the best alternative use of the founder's time.

The cash flow advantage.

The above is the "headline cost" comparison, but the picture changes again when you look at when the cash actually moves.

Every alternative — in-house, flat fee agency, DIY — has you paying cash out before you've collected cash in. Salaries are payable on the first of the month. Agency retainers are paid in advance. Google's invoice arrives whether or not the campaign converted. The cash gap between spend and revenue is the silent killer of bootstrapped software companies.

Our model puts cash out and cash in on the same monthly cycle. We carry the ad spend exposure on our balance sheet. We bill our 35% against the sales Google Ads actually reported. Your runway stays intact while your top of funnel grows.

Where this breaks.

The model isn't universal. Here's where the math stops working.

  • Gross margin below 70%. The 35% commission doesn't leave enough room for your COGS and operating expenses.
  • Pre-PMF — before product-market fit, while you're still proving people will pay. There's no signal for us to bid against, and no funnel to drive intent traffic into.
  • Enterprise sales cycles past six months. The lag between ad click and reported revenue is too long for the bidding loop to learn.
  • Categories Google outright bans or licenses — gambling, prescription products, regulated finance. Legitimate software that Google's compliance algorithms wrongly flag is a different story; that we take.
  • Customers worth under $5K a year. The unit economics break — our percentage of a small sale isn't worth our overhead, and the cost of acquiring each customer outruns what the sale returns.

We'll walk from the audit if any of these are true. We'd rather pass on a deal than take one we can't deliver on.

What this means at your stage.

If your software business is post-PMF — real customers paying and renewing — with gross margin above 70% and past $500K in annual revenue, this math is your math. At the stage where a Head of Growth doesn't fit yet, we're structurally cheaper than any alternative that delivers comparable results. Past that stage the fee converges with a hire's cost, but the cash outlay doesn't: the ad spend still never leaves your account. The headline 35% looks high; the all-in math doesn't.

The 30 minute fit call is free. After it we do a day or two of offline due diligence and come back with a yes/no on fit. If it's a yes, you get this page's math run against your numbers — your price point, your margin — written up before there's anything to sign.

Want this against your numbers?

Walk us through your setup — whatever you're comfortable sharing. We'll show you what the math looks like at your price point, margin, and growth targets, and tell you whether the model fits. Confidential, no obligation.

Book a fit call →