Fee-commission combination
Some times agencies are compensated through a Fee-commission combination, in which the media commissions received by the agency are credited against the fee. If the commissions are less than the agreed-on-fee, the client must make up the difference. If the agency does much work for the client in noncommissionable media, the fee may be charged over and above the commission received.
Both types of fee arrangements require that the agency carefully assess its costs of serving the client for the specified period, or for the project, plus its desired profit margin. To avoid any later disagreement, a fee arrangement should specify exactly what services the agency is expected to perform for the client.
The ‘commission system’ and the ‘fee system’ developed side by side. Some people have always argued that the fee system was the most rational and fair commission system.
Some times agencies are compensated through a Fee-commission combination, in which the media commissions received by the agency are credited against the fee. If the commissions are less than the agreed-on-fee, the client must make up the difference. If the agency does much work for the client in noncommissionable media, the fee may be charged over and above the commission received.
Both types of fee arrangements require that the agency carefully assess its costs of serving the client for the specified period, or for the project, plus its desired profit margin. To avoid any later disagreement, a fee arrangement should specify exactly what services the agency is expected to perform for the client.
The ‘commission system’ and the ‘fee system’ developed side by side. Some people have always argued that the fee system was the most rational and fair commission system.