A flat monthly fee suits most small and medium businesses, because your cost stays predictable and the agency gains nothing by pushing your budget up. Percentage-of-spend pricing, usually 10 to 20 percent, is more common on large accounts, where it should come with a cap or a minimum you agree in writing.
The problem with a percentage model is the incentive. Every dollar of extra spend earns the agency more, whether or not the extra clicks bring in work. Ask what the fee would be at your expected budget and at double it.
Scalepoint charges a flat A$990/month + ad spend, ex GST, so our fee does not rise when your budget does.
This is one part of a bigger picture. How to choose a Google Ads agency in Australia covers fees, ad spend, account ownership, proposals and timelines in one place.