Contractor marketing costs two separate things, and most confusion comes from mixing them up. The first is the ad budget, the money you pay Google or Meta for clicks and views. The second is the fee you pay a person or agency to run it. How much you spend on each depends on your trade, your town, how many jobs you can handle, and which pricing model the agency uses. The model matters more than the number on the proposal, because it decides what the agency is paid to care about.
This guide walks through the common pricing models, what drives the cost up or down, and how to read a proposal so you know what you are buying.
Ad budget and management fee are two different bills
Your ad budget goes to the platform. If you run Google Ads, Google bills your card for every click. If you run Facebook ads, Meta bills you for reach and clicks. That money buys attention. Nobody keeps it but the platform.
The management fee goes to whoever builds and runs the campaigns. It pays for the keyword work, the ad copy, the landing pages, the tracking, and the weekly decisions about what to cut and what to push.
Ask every agency one question early: does the ad budget sit on my card, in my own account? It should. If an agency bundles spend and fee into one monthly number, you cannot see how much of your money reached Google. You also lose the account history if you leave. Owning the ad account is the single best protection a contractor has.
The five pricing models you will see
Monthly retainer
You pay a flat fee every month for a defined scope of work. This is the most common model for SEO, Google Business Profile work and ongoing ad management.
What it rewards: steady effort. A good retainer agency has a clear plan for the month and reports on it.
What to watch: a retainer pays the same in a busy month and a quiet one. Ask what the agency does when leads drop, and how quickly.
Percent of ad spend
The fee is a share of what you spend on ads. It is common in paid search and paid social.
What it rewards: bigger budgets. That is fine when more spend genuinely books more jobs, and a problem when it does not. An agency paid on spend has no built-in reason to tell you to spend less, even in your slow season.
What to watch: ask whether there is a floor, and whether the agency will recommend cutting budget when the return is not there.
Pay per lead
You pay for each lead delivered. Some services sell the same lead to several contractors at once. Others sell exclusive leads.
What it rewards: volume of leads, not quality. A lead is a name and a number. It is not a booked job.
What to watch: shared leads put you in a race against several other companies calling the same homeowner. We cover the alternatives in how to get more contractor leads without buying shared leads.
Performance or commission
The agency is paid a share of revenue from jobs it helped book, sometimes with a smaller base fee. This lines the agency up with what you care about: closed work.
What it rewards: booked, paid jobs. It forces both sides to agree on tracking, because nobody gets paid until a job is traced back to a lead.
What to watch: it only works if your call tracking, your CRM or job board, and the agency’s reporting all talk to each other. Ask how a job gets credited, and who decides.
Project fees
You pay once for a defined deliverable: a new website, a set of service pages, a Google Ads build, a Business Profile cleanup.
What it rewards: finishing the project. It does not cover what happens after launch.
What to watch: a website that nobody updates or tests slowly stops earning calls. Ask what support looks like after the handoff.
What drives the cost up or down
Your trade
Roofing, remodeling and outdoor living jobs are large tickets, so more contractors compete for those clicks. Painting, concrete and garage door work vary a lot by market. The more a single job is worth, the more competitors will pay for a click, and the more each click costs you.
Your town
A dense metro with dozens of remodelers costs more per click than a smaller town with three. Service area matters too. A tight radius around the towns you actually want to drive to keeps spend on homeowners you can serve.
How many channels you run
Google Ads alone is one job. Google Ads plus Local Services Ads plus SEO plus Facebook ads plus a website rebuild is several jobs. Each channel needs setup, tracking and someone checking it. Start with the channel closest to buyers who are ready now, usually search, and add from there.
The state of what you already have
A clean Google Ads account with working conversion tracking is cheaper to manage than one with years of broad match keywords, no negatives and form fills counted as sales. A website that loads fast and has one page per service is cheaper to market than one page that tries to say everything. Cleanup work is real work.
How fast you answer the phone
This one is not on the invoice, but it changes your real cost per job more than anything else. A lead called back within minutes is worth far more than the same lead called back tomorrow. If your office misses calls, every dollar of ad spend buys less.
How to read a proposal
Put any proposal next to these questions:
- Whose name is on the ad account? It should be yours.
- What counts as a result? Calls and booked jobs, not impressions or clicks.
- How is a phone call tracked? Most contractor leads call. If calls are not tracked back to the campaign, nobody knows what works.
- What happens in month one? A real plan names the campaigns, the pages and the tracking that will be set up.
- What is the exit? Short notice periods and full ownership of your accounts, pages and data.
- Who does the work? You want to know the person running your account, not just the salesperson.
For a longer checklist, read how to choose a contractor marketing agency.
Where the money does the most work
For most contractors the order is simple. First, make sure the website turns a visitor into a call. Then fix tracking, so you know which calls came from which source. Then put budget into search, where the homeowner is already looking for your service in your town. Google Ads for contractors and a properly set up Business Profile catch that demand. SEO builds on it over months. Facebook ads work best once you know your offer and want to reach homeowners before they search.
Spending more before those first steps are in place mostly buys more of the same leaks.
Who is writing this
Nathan Synoground founded Fruitful Local. He has managed $20.5M in Google Ads across 150 client accounts since 2018, including $2.8M in Google Ads for home service and contractor businesses across 43 accounts. In 2025 and 2026 he also started and grew multiple contractor companies from zero to a million in revenue, so the pricing question is one he has sat on both sides of. You can read more on the home page.
Get a free contractor marketing review
If you want a second opinion on what you pay now, or on a proposal in front of you, Nathan’s team at Fruitful Local will look at your current marketing for free. We will tell you what we see, where the money is going, and what we would change first. No obligation. Use the form below.