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The Madison Avenue Field GuideA field guide to marketing & advertising, by Brandon Mina

GlossaryAgency & IndustryCommission-Based Compensation

Agency & Industry

Commission-Based Compensation

An agency fee model where the agency earns a percentage of media spend, historically 15%, aligning revenue with budget size rather than effort.

By Brandon MinaCEO, BrandPilot AIUpdated November 2026

Short answer

Commission-based compensation is an agency fee model in which the agency earns a percentage of the client's media spend, historically 15%. It ties agency revenue to budget size rather than time or results. Many advertisers have shifted to fees or performance-based models because commissions can create incentives to recommend higher spending.