Why we do not charge a percentage of spend
It is the default fee model in this industry, and it pays your agency to do the one thing you should be most careful about.
A percentage of spend pays the agency more when the budget goes up and less when it comes down, which puts the person advising you on budget on the wrong side of that decision. We charge a monthly fee for the work instead, so that recommending a cut costs us nothing.
The incentive, stated plainly
On a fee of fifteen percent, an agency asked whether to raise a budget from fifty thousand to eighty thousand is being asked whether to raise its own invoice by four and a half thousand. It may still give the right answer. It is simply paid to prefer one.
The same problem runs the other way and is worse. When a campaign should be paused, the fee model quietly argues against pausing it.
What the model rewards over a year
Percentage fees make scale the goal, because scale is the fee. That is why so many accounts drift toward broad campaigns, automated bidding with no exclusions and a budget that only ever moves upward. None of it is fraud. It is the shape the incentive presses an account into.
A monthly fee has its own bias, which is worth naming: it pays the same whether the work is done well or adequately. We answer that with reporting on cost per qualified lead rather than activity, and an agreement you can end when the number stops moving.
What we charge instead
A monthly fee set against the work the account needs: how many campaigns, how much creative, how often the search terms need working. It does not move when your budget moves, which means the conversation about budget is only ever about your return.
The practical test of any fee model is simple. Ask what happens to the invoice if the right decision this month is to spend thirty percent less.
What to take from this
- 01A fee on spend pays the adviser more for advising you to spend more
- 02It argues quietly against pausing what should be paused
- 03A monthly fee is neutral on budget and biased toward comfort, which reporting has to answer
- 04Ask any agency what happens to their invoice if you cut spend by a third
Ask the question directly
- Is a percentage ever reasonable?
- On very large accounts where the work genuinely scales with the money, it can be. It is still worth pairing with a floor and a ceiling so the fee stops tracking the budget exactly.
- What about performance fees on results?
- Better aligned and harder to define honestly. A fee on leads pays for volume rather than quality unless you can agree what qualified means and who judges it, which is a contract question before it is a pricing one.
Related answers
Performance marketing
Google Ads, Meta, TikTok and LinkedIn run as one account structure, with conversion tracking you can defend and spend paced against cost per qualified lead rather than clicks.
SEO or Google Ads first?
Bring the decision you are stuck on
A call, forty five minutes, no deck. We will tell you if we are the wrong firm.