Management fee and percentage of spend
The two ways an agency charges to run your ads: a flat retainer, or a share of what you spend.
Agencies charge for running ads in one of two ways, or both: a flat monthly retainer, or a percentage of the ad spend they manage — in India the published bands run from roughly ₹8,000 to ₹50,000 a month, and established agencies move to around 15% of spend once the spend is real. The percentage model has an obvious tension: the agency is paid more when you spend more, whatever the spend does. The retainer model has a floor below which it cannot work: under about ₹20,000 of monthly spend a fee bigger than the waste it could recover is simply a second leak. Which side of the floor you are on decides whether to hire anyone at all.
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