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Agency Guide

How paid media agencies charge: pricing models explained.

The common ways paid media agencies charge, when each one makes sense, and what to ask before you sign.

The short answer

Most paid media agencies charge a percentage of ad spend, a flat monthly retainer, or a hybrid of the two. Percentage-of-spend fees are commonly in the 10–20% range, often with a monthly minimum. Performance-based pricing exists but is less common for full-service work. The right model depends on how much you spend, how much that changes, and what's included beyond buying the media.

The four common models

Percentage of spend

The fee is a share of your monthly media budget, commonly 10–20%, often with a minimum.
Works well whenSpend changes a lot month to month, and you want the fee to scale with the work.
Watch out forAn incentive to recommend more spend. Ask how the agency decides when to spend less.

Flat retainer

A fixed monthly fee for an agreed scope of work.
Works well whenSpend is fairly steady and the scope is clear.
Watch out forWhat happens when scope grows, like new channels, markets or launches.

Hybrid

A base fee plus a lower percentage above a set spend level.
Works well whenYou want predictable costs with room to grow.
Watch out forMake sure the threshold and the percentage are clear in writing.

Performance-based

Part or all of the fee is tied to results like leads or sales.
Works well whenResults are tracked cleanly and the agency controls most of what drives them.
Watch out forDisputes over what counts, and pressure to chase volume over quality.

What the fee should cover

Included

Strategy & planning

Channel mix, budgets and goals, updated as results come in.

Included

Setup & management

Building campaigns and managing them day to day.

Ask

Tracking & analytics

Tag setup, conversion tracking and analytics fixes are sometimes billed separately.

Ask

Creative

Many agencies guide creative but don't produce it. Know who makes the ads.

Ask

Reporting

Dashboards and regular reviews, and how often you'll meet.

Ask

Tools & data

Whether platform, tool or data costs are passed through.

Questions to ask before you sign

01

Is there a minimum monthly fee?

Many percentage-based agencies have one, which matters at lower spend levels.

02

Does the fee cover every channel?

Some agencies price each channel separately.

03

Are there markups on media?

Especially for programmatic, print and offline buys, ask whether rates are net or include a markup.

04

What's the contract length and notice period?

A short initial term with a reasonable notice period is common.

05

Who owns the accounts and data?

Your accounts should stay yours regardless of how you pay.

Want a second opinion on what you're paying?

We can review your current media and, for print, compare your rates against what we can secure. See how we can help →

FAQ

Common questions.

How much does a paid media agency cost?

It depends on spend and scope. Percentage-of-spend fees are commonly in the 10–20% range, often with a monthly minimum, while flat retainers are priced by the number of channels and the amount of work.

Is percentage of ad spend a fair way to pay an agency?

It can be, especially when spend changes a lot. The key is an agency that recommends spending less when that's the right call. Ask how they've handled that before.

What's the difference between a retainer and a percentage-of-spend fee?

A retainer is a fixed monthly fee for an agreed scope. A percentage-of-spend fee rises and falls with your media budget.

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