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Hello All. We are looking for some experience with digital media compensation as we are currently re-evaluating how we estimate/bill for digital media and related services like media planning, buying, continual monitoring/optimization and detailed reporting. Are you charging commission for paid media (to cover internal time spent on all services)? Or are you billing the client for the media with no mark-up, but charging a retainer for monthly management, maintenance, etc.? Any insights or help you can provide would be greatly appreciated. Thanks!
I have spoken with members about this and both options are in use. Some treat digital media like traditional media and charge a commission that is meant to cover their time for planning, buying, reconciliation, etc. Based on the 2016 Annual Survey, the margin for online media is about 13.5% so agencies are getting close to the "traditional" 15%. Others charge the media at net, and add an hourly service fee to cover time for planning, buying, reconciliation, etc. The Annual Survey reports a rate of $132 for media planning and buying and $146 for digital strategy.
As with traditional media, you might find that charging a commission on smaller buys does not cover your time for the related activities so you may need to charge a fee to ensure you're covering your time and making some profit. You may decide to employ both options with media buys under a certain amount having a service fee and larger buys handled on commission.
Let me know if you want to discuss further on the phone.