Percentage-of-spend pricing
Percentage-of-spend is an ad agency pricing model where the agency's monthly fee is a fixed percentage (typically 10 to 25 percent) of the client's actual ad spend on the platform. FexAds uses this model: 20% under $1,000/month spend, 10% above. It replaces the traditional flat retainer.
The defining feature of percentage-of-spend is that the agency's incentive is aligned with the client's growth. When the client scales spend, the agency's fee scales. When the client pauses or cuts spend, the agency's fee drops automatically.
Compared to retainer pricing, percentage-of-spend is dramatically cheaper for clients spending under $20,000/month and slightly more expensive for clients above $30,000/month.
It works best for execution-focused services where labor scales with spend (more spend = more campaigns = more management hours) rather than for strategy-heavy engagements with fixed deliverables.