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by joelrunyon 3138 days ago
Eh -

For a lot of marketing companies, fee is based on a % of ad spend. So increased CPC does increase the overall fee.

1 comments

As someone with quite a bit of experience negotiating and scoping agency fees, I'll say this only works to an extent.

Sure a % of media pricing model might net them more in the immediate term. But if it comes at the expense of reduced performance, that relationship won't last because at some point, the client will fire them.

Various fee models have their own strengths and weaknesses, and each has their own weighting of which party shoulders the bulk of the risk. % of media models shift that burden heavily to the client whereas rev-share models do the reverse.