Pricing Models
Part of Agency pricing and commercial models
Separating media spend from agency service fees: bill check
Distinguish ad purchases from agency work, check who pays the platform and reconcile approved spend with billed costs.
Media spend pays the platform or publisher for advertising; the agency service fee pays for the agency’s work. If one supplier invoices both, ask for each amount to be shown separately.
Before approving a campaign budget, establish who pays the media seller, what the agency fee covers and which records will show the amount actually billed. A single campaign total does not answer those questions.
Trace the money
Ask for the proposed amount to be split into media purchases, the agency service fee, creative or production, technology and other relevant supplier costs. Mark each line as a committed fee, a spending authority or an estimate.
Confirm whether the campaign total includes the agency fee and applicable GST. Do not add either again if it is already included.
| Line | Question to settle |
|---|---|
| Media purchase | Who pays the platform or publisher, and who can change the spend authority? |
| Agency service | Which planning, setup, optimisation and reporting tasks are included? |
| Production and tools | Which assets, licences or services cost extra? |
| Adjustments | How will credits, refunds and applicable GST appear? |
These categories are a way to request a breakdown, not a claim that every campaign incurs every charge. Check the account’s payment arrangement and the separate agency agreement because neither alone describes the whole client cost.
For Google Ads, check the payments profile, manager-account billing setup and spend-management information alongside the agency agreement. These account details help establish the payment arrangement, while the agreement sets out the agency’s charges.
Key Considerations for Media Spend & Agency Fees
- Media purchase payer
- Platform or publisher
- Agency fee coverage
- Planning, setup, optimisation, reporting
- GST inclusion
- Confirmed in contract or invoice
- Direct access to seller invoice
- Not always available under resale arrangements
Check how the agency fee is calculated
Check whether management is charged as a fixed amount, for time worked or by reference to media spend. For a percentage-of-spend fee, calculate the agreed percentage against the agreed media-spend base for the contract’s calculation period.
Confirm how the spend base is defined, the calculation period, any minimum and the treatment of pauses and credits. The fee cannot be checked reliably if those terms are unclear.
If the agency buys and resells media, ask whether its price includes a margin and what purchase evidence or cost breakdown it will provide. Direct access to the seller’s invoice may not be available under every resale arrangement, so agree on acceptable verification evidence first.
Check how any rebates, commissions, mark-ups or other media-related benefits are disclosed and treated in the contract. Do not treat a media-related benefit as the agency’s service fee unless the agreement says it is.
Reconcile budget and billed cost
An approved media budget is not evidence of the final charge. Platform rules for calculating spend and adjustments vary, so do not assume they apply to every platform, budget type or agency invoice.
For each period, compare approved media spend with the platform or publisher cost record where available, and compare the agency fee with the agreed fee calculation. Keep any agency recharge, credits and adjustments identifiable rather than blending them into the service fee.
Align the records by dates, currency and GST treatment. Then compare the total billed amount with the approved campaign budget, counting the media, service fee, production, tools and other costs only where they were included in the approval.
If the agency pays the seller and recharges you, identify that recharge separately from its service fee. Where direct platform records are unavailable, document the substitute evidence agreed with the agency and any limit that places on verification.
The reconciliation should show what advertising was bought, what the agency charged for its work and what remains approved or committed. Resolve an unexplained difference before increasing spend.
