Global Marketing
Management Consultants
Global Marketing
Management Consultants
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Global Marketing
Management Consultants
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Fixed Project Fee

This form of agreement is where the agency and the marketer agree a price in advance for particular services, and the agency costs and profit are not transparent to the marketer.

    • Fixed project fees are common but require clearly defining the requirements of the project up front.
    • Where the project type is regularly undertaken, then historical data can be used to define the agency resources required and the appropriate cost.
    • It is often tempting to set the fixed project fee based on the percentage of the budget, but without accurate historical data it could be well over or under compensating the agency.
    • Also fixed project fees can have variable components outside the fixed fee such as production, which would be added as a mark up or an additional estimated resource fee.

Advantages

  • Easy to implement based on budget and historical costs
  • Agency manages split with third parties and retained revenue
  • Agency works within the fixed cost to deliver outcomes

Implications

  • Lacks transparency
  • Difficult to know if paying too much or too little

Read more on Project Fees here