The Only Amazon PPC Contract You Should Sign

If an Amazon PPC agency guarantees results in 30 days, run. But if an Amazon agency requires 12 month contract without accountability, run even faster. There are several things that I like to go through in this video. First is that you need to understand if you're thinking, I'm working with this agency for over 3 weeks now. Why I'm not seeing results? Well, PPC is not a light switch because there are certain processes that simply take time. We need to have a significant amount of information in order to make good decisions about your account. Take search term harvesting for example. It's a different thing if this is happening midseason or if it's low season. Sometimes it can take weeks just to accumulate enough data to make a reasonable decision based on data, not on a hunch or a feeling. We need to know which keywords work, which search terms work, which placements work on which campaigns. So, it's more nuanced and complicated than just running campaigns and watching the acos. Also, different product life cycles affect PPC. Are the reviews coming in at a good pace? Is the inventory sorted out? Do we have deviations in pricing because we have a repricer or we are testing different prices? Are there maybe different changes on the listing? So we are testing different creatives. Our clickthrough rate is going up or down depending on what we did on the creative side. Is the conversion rate stable or not? And then all of that times different products, different subcategories, all of that combined gives us the complexity and we definitely need more time to understand what's going on. We need to go together through this learning curve of your account and to find a proper way that we like to communicate. Is it once a week, once in two weeks, once a month with the daily Slack messages? All of these takes time. Now, what about month-to-month contracts? Everybody loves them. By the way, it's how we've been doing PPC since day one for the last 10 years. But there are some pros and cons to this approach as well. We are perfectly aware that our partner, that is the seller, can leave next month. That's the reality of it, and we are okay with that. We simply try to perform as better as we can and grow the account if that's the goal that we want to accomplish. And month over month we are seeing good results and we work together and everyone's happy. We've been doing like that as I said for 10 years and typically our partners are working with us for two, three, five, six years all by monthly contracts month over month. So they are able to leave whenever they like but they're staying for multiple years with us. That I think says enough. But there's also cons to this approach with having month-to-month contracts. Now if we are communicating improperly to the other side, not just me and my agency but in general every agency. Now if we are doing a bad job in communicating how much time it's actually needed to see the proper changes into the account after we went through this phase of restructuring the account, learning about the products, aligning with profit margins and everything. It needs to be clearly communicated that you will not probably see anything in the first month. Yes, we can cut some ad spend in the first month though. Those are some of the quick and easy wins and there are several of those and that's fine. That's like a house cleaning project. But to actually grow the account that takes time mostly because there are certain campaign restructures that have to happen in order to be able to have a granular control over what's happening in the account. So if the communication is bad that can end up the cooperation really really fast. So setting proper expectations on both sides — that needs to happen and it's a must. Now the other side of that is when an agency requires long-term contracts. Well that may sound fair because the agency needs protection because restructuring takes time. Training of the internal team takes time. Knowledge takes time. Restructuring of the account takes time. So if we do the heavy lifting for a month or even two and then the brand decides to quit, we invested a lot of our time and expertise in just doing the heavy lifting and then the relationship broke. On the other hand, long-term contracts can be dangerous if there is no accountability. There are no milestones. If this happens then the contract can be terminated with a certain notice, let's say 7 days, 15 days, 30 days depending on the agreement. There also can be bad because agencies can lay back — I have a 12 month commitment so I can do a lousy job and just gather the money. So that's also not ideal. Now you may ask, what is the ideal contract? So month-to-month is bad, 12 month is bad. We operate on a month-to-month basis. But then again, I think ideally at least 3 months would be enough time. It doesn't have to be a true contract. But if that works for either party, that can also be part of a contract. But at least 3 months need to pass before we actually go through the learning curve. Learn about the products, learn about the competitors, get to know each other, the style of communication that each party has, strategy and all of that stuff. Because month over month it can be like this — the first month is basically doing a deep audit of the account, a house cleaning process, eliminating wasted ad spend, some products that are bleeding money, building out the road map for where we want to be. Then month two would be the expansion and testing phase — what's working, what's not, we're now getting a grip of the account. Then month three is reviewing what happened and talking about scaling opportunities. Just in a nutshell. So the best option is that during the interview you should be asking your agency, and also asking yourself, what should happen in the next 90 days that we would consider a success — and try to make it measurable, accurate, tangible. Now, I'm not going to tell you the perfect answer to this because that can be learned. But let's say that if the other party is vague about their responses to this, then you may have a problem. And that means that you need to further communicate on the proper measurable expectations in the next 3 months for both parties. And to close it out, I want to say that Amazon PPC is not a magic trick and it's not a gym membership. Account accountability needs to start from day one and contracts are not about the length. It's about setting the right expectations. So if you both agree that a 3 month or six month period is enough depending on the size of the account, then put that into the service agreement with clear milestones like month number one, month number two, month number three and stick to the plan. Remind each other on what you agreed on and where you are currently in the process. It's all about clear communication and just being plain honest and transparent on what's happening in the account. As again, this is a partnership. It's not a one-way cooperation. It's not like the agency should do everything. It's not like sellers should be doing everything. We can only succeed if we are literally partners in this process. So, I hope you found this useful and that it will help you choose your next agency much better for the long-term success. See you tomorrow in the next video. Bye-bye.