Are there standard agency percentages?

frobisher

I've been hearing conflicting reports on the amount of % that agencies charge for advertising and media space.
Can anyone clear this up for me?
I have been asked to find an advertiser interested in a certain event/space, which I have done, is there an industry standard % I should charge for this?

Buglim

Hi


The industry standard is 15% (This is practically an international standard) and a retainer (which can vary) but if you are not a recognised agency most media contractors and owners will not pay.
In your case Instead of a retainer I would charge 20%. They may feel this is a bit steep but if you have done all the work then I think it is more than acceptable.

frobisher

Hi Buglim,
That's what I heard too, unfortunately this client is saying that they've been told that only the top agencies command 15% and that it's usually closer to 10% and they're not going to budge on it. :mad:

Buglim

Hi F

I think he probably has you in a tight spot if you didn't set down the rules first. The rule is 15% across the board and never have I heard of a 10% payment. At least the next time you'll be able to negotiate on your terms.

regards,

B

JohnDigital

15% commission is paid by all media owners in favour of bookings coming from IAPI accredited advertising agencies in ROI. (These days though for large advertising accounts (€1m+) the majority of that is passed back on to the client again and the agency only retain a small portion).
10% AC is still standard across most media in the UK and NI.

From what I understand you are sub contracted to sell advertising space at an event. Are you actually taking the bookings and receiving the payment from the client and then passing on the payment to the owner, or are you just finding clients for the media owner and introducing them to each other?

If it were the latter, in that instance really you would be very lucky to get anything, much more than 5% of the gross cost.

In fact most poster specialists who look after business for the likes of Viacom, JC Decaux etc would normally receive 5%-7% commission from the media owner.

Buglim

Hi John

I'm in a very strong position to say that the last line about JCDecaux and Viacom is incorrect, also 15% is paid by a majority if not all media owners and contractors even if the account is as small as €1 (some large UK account that come direct from the UK actully get 20% John eg Proctor & Gamble).
Also you stated the 15% is paid to the media owner and this is also incorrect as it is paid to the agency with the media owner or contractors receiving 85% of the booking ( some of the major agencies may have a slightly different set up for extremely large brands as you stated large €1 million + accounts).
As F had a very mixed role in the sale of the medium at the time he should have asked for a standard 15%.

Regards,

B

Buglim

Hi John

I'm in a very strong position to say that the last line about JCDecaux and Viacom is incorrect, also 15% is paid by a majority if not all media owners and contractors even if the account is as small as €1 (some large UK account that come direct from the UK actully get 20% John eg Proctor & Gamble).
Also you stated the 15% is paid to the media owner and this is also incorrect as it is paid to the agency with the media owner or contractors receiving 85% of the booking ( some of the major agencies may have a slightly different set up for extremely large brands as you stated large €1 million + accounts).
As F had a very mixed role in the sale of the medium at the time he should have asked for a standard 15%.

Regards,

B

JohnDigital

B. I think you have taken me up wrong on some points.

Firstly by poster specialist I mean the likes of Poster Plan, PML, Poster Scope etc. who work as an intermediary between the contractors and the agency or the contractors and a direct client. The media contractor (say JC Decaux) will allow commission of roughly 5% to the poster specialist and 15% to the agency. So the contractor is receiving 80% of the gross cost. I am saying that the OP seems more like they are in the position of a poster specialist rather than an agency.

15% commission is allowed to all IAPI member agencies regardless of the size of the transaction.

(What I was saying is that on large pieces of business the agency does not get to retain that 15% themselves, rather the norm now is that a large proportion of that goes back to the client who is paying for the campaign. Nowhere did I state that 15% is paid to the media owner, I said paid *by* the media owner).

If the OP is not becoming the principal in the transaction and taking the financial burden and legal responsibility for the contract as an agency would, then I cant see any way that he could be paid more than 5%.

I guess it all depends on what it is that he is selling space on though. If it is some A2 frames in the portaloos in Slane then maybe he could be lucky and get 15%, but if it is something more substantial then I doubt it.

Basically what the OP needs to decide is what remuneration he requires to make the whole thing viable for his time and expertise, and the value of the contract. He is not entitled to agency commission, so it is probably the wrong terminology to use in the first place. Its more like a finders fee that he is after.

Buglim

Hi John

I agree totally but I still believe if he put himself in a stronger position originally he should have received a higher commision.