Can someone please tell me how advertising commissions REALLY work?

frobisher

I've been told that if I have some advertising space to sell (billboard/TV slot etc) that I have to give 15% to the agency that buys it off me on behalf of their client and that sometimes there can be a second agency involved who I have to pay too.
Is this true? If not, how does it really work?

tomthevet

Can't imagine why there would ever be two agencies but yes 15% is standard commission to the agency. If you are marketing space don't forget agencies have more that 1 client and will be happy to take space / spots from you if they find their getting good exposure for their clients

frobisher

tomthevet wrote:

Can't imagine why there would ever be two agencies but yes 15% is standard commission to the agency. If you are marketing space don't forget agencies have more that 1 client and will be happy to take space / spots from you if they find their getting good exposure for their clients

I see. So If I sell €1000 worth of space to an agency on behalf of their client I pay them €150 from that fee as their commission?

tomthevet

Exactly

frobisher

tomthevet wrote:

Exactly

I understand now! Nice one.

connundrum

But handing over that 15% can be a real pain in the ass. Why don't you get a part time sales person who can contact potential advertisers directly, thereby skipping the agency and saving you some dollars... ie. only give the sales person 10%

RudolfDiesel

Where can i buy these spaces-as in buy it outright?
Thanks in advance

blue4ever

The days of giving an ‘agency’ 15% are (should be) well and truly numbered. I mean, what do they do – f all.

Go direct – it that only way. Save yourself a load of money and do it yourself – ring the media and ask for rates, positions/times etc – and screw them to the wall (if they are willing)

WATPOAE

blue4ever wrote:

The days of giving an ‘agency’ 15% are (should be) well and truly numbered. I mean, what do they do – f all.

Go direct – it that only way. Save yourself a load of money and do it yourself – ring the media and ask for rates, positions/times etc – and screw them to the wall (if they are willing)

Presume you're speaking from experience here then?

Believe me, all media agencies work bloody hard for their commission/fee and the actual number of clients where you make 15% are extremely thin on the ground due to the intense cost competition between agencies.

As far as agencies supposedly doing **** all, I presume you've never worked in one otherwise I doubt you'd be of that opinion.

As regards selling advertising space, if you have space to sell whether it be in a magazine, newspaper, radio station, billboard, etc, it is generally in your interest to deal with agencies as they will have a client base that will supply long term spending versus the majority of smaller, direct businesses who may dip in and out of the market.

blue4ever

Don’t be too quick to assume/presume my career history – my vitriol comes from seeing both sides of the fence - i prefer the space providers.

Agencies don’t supply long term spending – they spend their clients money – the clients supply the long term spending. If you think you afre doing a 'media' a favour by placing an ad with them you are not - I assume you are spending your clients money wisely.

As opposed to the merits of dealing with direct or agency – here is my theory: Agencies don’t care – especially if they have to work for the ‘15%’. The fact that they are slow/never return a call – unless it’s a mate (that’s someone that buys them lunch in the Unicorn). The best way is to deal direct with the client – if you are instructed by them to go through the agency – so be it, if not – spare yourself the pain and stay direct.

blue4ever

WATPOAE wrote:

Presume you're speaking from experience here then?

Believe me, all media agencies work bloody hard for their commission/fee and the actual number of clients where you make 15% are extremely thin on the ground due to the intense cost competition between agencies.

As far as agencies supposedly doing **** all, I presume you've never worked in one otherwise I doubt you'd be of that opinion.

As regards selling advertising space, if you have space to sell whether it be in a magazine, newspaper, radio station, billboard, etc, it is generally in your interest to deal with agencies as they will have a client base that will supply long term spending versus the majority of smaller, direct businesses who may dip in and out of the market.

Funny – I only noticed that that is your ‘first post’ well under that Nome de plume anyway…. Spin doctor or the like with an agency business sibling?

Enough, me thinks - spin somewhere else..

WATPOAE

blue4ever wrote:

Funny – I only noticed that that is your ‘first post’ well under that Nome de plume anyway…. Spin doctor or the like with an agency business sibling?

Enough, me thinks - spin somewhere else..

Yeah, sorry for posting. I should bow down in awe of the bloke with a whopping 32 posts! Jesus, calm down.

I happened to come across this board while surfing through boards.ie and found the topic interesting enough to enter a post.

I actually work in an agency myself and to be honest, you sound like you were the victim of some extremely ****e agency who didn't value your business and gave you very bad service. They are out there, I freely admit that. But to start accusing all agencies of not earning their fee or commission is laughable to say the least. That we only return calls if the client is a mate?! That's priceless. I doubt I'd still be in a job if I took that approach.

And yes, we do spend our client's money wisely. And no, I don't think I'm "doing the media a favour" by spending money with them. Its a two way street; I spend a lot of money with say, a particular newspaper, they give me a competitive price, everybody's happy. Staying direct does also have its advantages if you understand the market and you're able to achieve the same or better cost savings that you would have got by employing an agency.

We're not all as bad as you make out. You generally find that the agencies who give crap service don't stay in business for very long.

blue4ever

No – post what you like – I just find that ‘people’ have used this b4 for pr purposes.

Before I come across (if not already) as a complete head case – let me explain my position, one case and, finally, this week.

anywho........

I pitched a large ad agency a promotional idea for one of the ‘larger’ clients - wont go into the specifics but it have the backing of a large media.

anywhy...

So far this week: sent two emails, made four phone calls – zip, nada, kiss my sweet….. Not even the emails replied to: Jesus Christ wasn’t that busy, neither was his Da – and look what their company did.

‘No thanks, they are not interested’ takes no balls at all – it’s simply manners.

At this point I have to revert to the client, direct, as I think its a good idea. I will go to great lengths to and explain why I am coming in the ‘direct’ door, and, may even embellish the story a little.

Maybe you are different, maybe you might have replied to an email

But you wonder why I think that they (the majority) are a little less than the MRSA bug.

WATPOAE

Depending on the size of the agency, sometimes it can be hard to reply to all proposals that you receive from media suppliers. I hear what you're saying, it can be very hard to put up with getting no answers from the agency after repeated calls, emails, etc. I get bombarded with offers and ideas from suppliers on a daily basis. I do my best to reply to all of them even if it is a no thanks answer. At the very least, they should reply to you one way or another.

Like all industries, there are the good and the bad.