Student Questions - how agency get revenue from the client from Anonymous: MarketingProfs Question 4165

Topic: Student Questions

How Agency Get Revenue From The Client

Posted by Anonymous on 11/19/2004 at 5:43 AM ET 75 Points

how does an agency makes it money from the client whether its through commission system(traditional way) or in any other way

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Posted by telemoxie on 11/19/2004 at 9:43 AM Member

Many agencies I call upon are doing an increasing amount of web development work, and so for that portion of their business, they are billing for their time on a time and materials or project basis.
Posted by Mushfique Manzoor on 11/21/2004 at 6:42 AM Accepted

hi mssenthil

in Bangladesh, where i come from, the agencies mostly charge 15% commission on the total bill for the work they have done for the client. This is mostly done when they do media buying, designing promotional materials etc. for the clients.

Again When AGENCY prepares a promotional plan (at the request/demand of client) and implements it, their fee is mostly tied to the following 3 factors
1. successful implementation of the campaign and
2. Achieving expected revenue in value by the client from the campaign.
3. Achieving expected sales in volume (unit) by the client from the campaign.

In factors 2&3, there are certain slabs used to be flexible in determining the fee of the agency.

For Example, the Target revenue was $1000. if the actual revenue is $1000 then agency will get a fee of $90. if the actual revenue is less than $1000 (say $700) then the agency fee will proportionately be determined ($63).

similar slabs is determined in case of volume sales target. But there is no hard and fast rule for determining slabs. This is mostly decided by the client and the agency through negotiation.

hope this helps.

cheers!!