Media commissions once funded most of the agency business. That era ended decades ago. Clients discovered they could get the same media discounts on their own, without paying an agency to broker them, and the commission model that built the industry for most of the twentieth century never really came back.
What replaced it, for most agencies, is some form of fee or retainer-based compensation. Plenty of agency principals are still uneasy with the word "retainer" specifically. It carries a reputation: heavy client scrutiny, sudden cancellations the moment a client's budget tightens, hours logged so precisely that the arrangement barely stays profitable once the accounting is done.
There's a real alternative to the retainer framing that solves a lot of that discomfort without changing the underlying economics much at all: ask clients to buy a block of time at a discount. Framed that way, the word retainer never has to come up. What the client experiences is a volume relationship: real value from ongoing strategic planning, delivered at favorable pricing. That framing also sidesteps a lot of the procurement-driven scrutiny that a formal retainer invites almost by definition.
Here's what it takes to build a compensation structure like this.
Blend Your Rate First
The foundation of a discounted package is a single, blended rate covering every service the agency provides, rather than a rate card with a dozen different hourly figures. Second Wind's own 2025 member survey puts the current average agency blended rate at $155 an hour, though the right number for any individual agency depends entirely on its own payroll and staffing mix.
Here's how to calculate it. Take the total base payroll and benefits for every billable employee on the account. Divide that by the total ideal billable hours for the year across those employees, a widely used industry benchmark is roughly 1,600 hours per full-time billable employee, adjusted down proportionally for anyone billing less than full time. That division gives a raw billing factor. Multiply that factor by a rate multiplier, typically in the range of 2.5 to 3, to land on the blended rate. Leaner agencies with lower overhead sometimes use a multiplier closer to 2.0 to 2.5, but should confirm that still fully covers overhead and profit before committing to it.
Keep the Agreement Simple
Write the agreement as a terms-of-engagement letter, not a dense legal contract. Clarity does more to protect the relationship than legal density ever will.
Set a Floor and a Ceiling
Translate the blended hourly rate into a number of hours allotted per month. Build in some flexibility, roughly 10 percent overage without penalty, then bill anything beyond that at the agreed blended rate. If a client underuses the hours in a given month, don't refund the difference. Instead, credit those hours forward to the next month, or spread the credit across a few months if the underuse was significant. A genuine floor and ceiling protects both sides from getting a bad deal.
Give Yourself a Real Exit
Build in at least sixty days notice for termination on either side. That window protects cash flow and keeps the relationship structured like an actual partnership rather than something either party can walk away from overnight.
Done well, fee-based compensation lets both agency and client operate with more predictability and less friction than commission or ad hoc project billing ever offered. It remains one of the most durable compensation structures available to independent agencies today.
