Agency fee percentage of ad spend vs fixed fee: how to pay a growth agency

Agencies earn more when we spend more. Founders of money transfer businesses say it plainly, usually after a quarter where spend went up, installs went up, and first transfers did not.

The problem is rarely bad faith. It is the contract. When the agency fee is a percentage of ad spend, the person advising you on budget is paid more if the budget grows. That is a conflict even when the people involved are honest.

This guide compares the 4 common marketing agency pricing models, shows how each one behaves in a remittance business, and sets out 5 questions to ask before you sign. It also states our own position and what it costs us.

The 4 marketing agency pricing models

Most agency contracts use one of 4 models, or a blend.

None of them is wrong in every case. Each one rewards something different, and in remittance the difference between "something" and "first transfers by corridor" is where money leaks.

Agency fee percentage of ad spend and the alternatives, in practice

Percentage of ad spend

The fee moves with the budget. It is simple to administer and common where buying is the main workload.

Where it works: large, stable budgets across many markets, where the effort of buying and optimising genuinely grows with spend.

Where it hurts a remittance business:

• An audit that finds the funnel leaking after the ad, at the KYC screen or before the first funded transfer, should recommend spending less. The agency's fee falls if it says so.
• Scaling a corridor with thin margin increases the fee while reducing your profit.
• The workload does not rise in line with spend. A campaign spending twice as much rarely needs twice the hours.

Fixed fee marketing agency retainers

A fixed fee marketing agency charges an agreed amount for a written scope. The fee does not change if you cut or raise the budget.

Where it works: when you want advice on budget that is independent of the budget, and when scope can be written down clearly.

Where it can go wrong:

• Vague scope leads to disputes, or to an agency quietly doing less.
• At very small budgets, a fixed fee can be large relative to spend.
• It needs a review rhythm, so that the scope changes in writing when your needs change.

Performance based agency pricing

Performance based agency pricing pays per result: per registration, per install, per first transfer, or a share of revenue or uplift.

Where it works: when the result is counted from your own records, the definition is exact, and there are caps.

Where it hurts a remittance business:

• Paying per registration or per install rewards cheap, unverified signups. Your cost per install is lying to you explains why those numbers mislead.
• Attribution disputes are routine. Google, Meta and the MMP can each claim the same first transfer. Whose count sets the invoice?
• A share of uplift can reward short-term promotions and rate discounts that lift volume and cut corridor margin.
• A share of uplift also depends on a baseline, and baselines move with seasons such as Ramadan and Christmas.

Project fees

A fixed price for a defined deliverable: an audit, a corridor landing page set, a tracking rebuild.

Where it works: one-off work with a clear finish line. It is also the lowest-risk way to test an agency before a retainer.

Where it can go wrong: projects handed over without anyone to run them afterwards, or scoped so tightly that the real problem sits outside the scope.

The models side by side

The incentive test: 5 questions before you sign

Ask these of any agency, including us. The answers tell you more than the credentials deck.

1. What do you earn if we cut spend by half next month? If the answer is "less", budget advice and the fee are linked.
2. What do you earn if first transfers double on the same spend? If the answer is "the same", check what else motivates the work. If the answer is "more", ask how first transfers are counted.
3. Whose numbers set the invoice? Platform-reported conversions or your own transfer records. Only the second is safe.
4. Is there any markup on media, tools or message fees? Markups are a second, less visible percentage.
5. How does the fee change when scope changes? It should change only in writing, with your sign-off.

A good answer to question 1 is the most important. The best budget advice is the advice that costs the adviser nothing to give.

To check whether an existing agency's recommendations have been sound, a paid ads audit reads the accounts against your transfer records and says whether spend should rise, hold or fall. If the incumbent is doing the job well, the audit should say so. What it covers is set out in what a paid ads audit should find in 14 days.

Our position, and what it costs us

We charge fixed fees only. The audit is a single fee. Projects are priced per scope. Retainers run monthly with a stated minimum term. We never take a percentage of media spend or a share of uplift, and we add no markup to media, platform or message fees.

That has a cost. We do not price on a percentage of spend, so we earn less as budgets grow. When a client's budget triples, our fee does not. When an audit ends with "spend less until the funnel holds", we lose the follow-on media work a percentage model would have paid for. We accept both, because they keep our advice on budget independent of our income.

It also has limits. A fixed fee does not guarantee effort by itself. That is why the fee is agreed in writing, and why a fee that moves without your written sign-off reverts to the original. The details are on our why us page.

This is not the only honest model. An agency paid on spend can give good advice, and many do. The point is to know which incentive you are buying, and to design the contract so that the incentive points at first transfers, send frequency and corridor margin. Why blended CAC misleads covers the numbers that should sit in that contract.

Where to start

Pick the incentive first, then the agency. Run the 5-question incentive test on your current contract, and model the pricing options against cost per first send with the calculator above.

If you want an independent view of whether your current spend should rise, hold or fall, start with one fixed-fee audit. Book a Growth Audit. The fee is agreed before we start, and you keep the roadmap whether or not we work together.