Agency Basics - Alternate Forms of Compensation

In many cases additional forms of compensation will be made to the agency that is on top of the agency fee. This compensation may be in the form of commissions on production or media purchases, charges for the agency’s creative services department or other forms of agency charges.


No one charges for it anymore.However, in the past, agencies have traditional been able to charge a commission on out-of-pocket client costs in relation to media or production (print) purchasing. Although there has been a trend away from charging commission, agencies will strive to do what is financially in the best interest of themselves and their clients. Some agencies increase their rates to compensate for the loss of 

commission, where some agencies have gone completely away from charging them.

In the past the traditional rate of commission on print or production related purchasing was .17625% and varies from 0% to 20%. Production commission is traditional charged on outside
vendor bills for items such as scans, art purchases, color house work, printing and manufacturing.
Media commission has also varied from 0%, 3%, 5%, and up to 15%. Media commission is traditional charged on purchasing advertising space in print, out-of-home, broadcast and other mediums.

Services not normally included in the fee.

Fee agreements should be very specific about what types of services the agency will provide, and additional services not provided in the fee will then be estimated and billed to the client on a project by project basis. This may be typical of clients who originally asked for traditional ad campaigns, but not internet related work or perhaps PR or research related projects.

Creative Services (Production & Studio Services compensation)

Traditionally, agency fee compensation included all staff members related to the clients work minus the production studio. In some agencies, separate production estimates will be created for the client to include charges for interactive services, content or post-production, studio mechanicals, proofreading, final file creation, final file releases, discs, programming and more. And in a few circumstances, the production estimates may include production management and or project management.