Start with the total commitment, not the headline fee
A paid media proposal is difficult to compare when management, advertising and production are bundled together. Before deciding whether an agency is affordable, ask for a breakdown showing what reaches the advertising platforms, what pays for agency services and what remains outside the quote.
A UK agency fee benchmark is **not published** in the IAB UK market reports cited below: they measure advertising expenditure, not agency management charges. Those reports cannot substantiate a claim about a typical retainer or a universal minimum client budget.
When shortlisting paid media agencies, request a proposal against a shared brief. Specify channels, markets, objectives, creative requirements and measurement responsibilities. Otherwise, apparently cheaper proposals may simply exclude more work.
Understand what the fee structure rewards
Fixed retainers
A fixed retainer makes the management charge predictable, provided the scope is defined. Ask what it covers: campaign strategy, account maintenance, creative testing, reporting, meetings and landing-page recommendations should not be left implicit.
Check the triggers for repricing. Additional markets, product feeds, business units or reporting requirements can change the workload without changing advertising spend. A useful contract explains how those changes are agreed before extra work begins.
Spend-linked management fees
A spend-linked fee rises or falls with an agreed advertising-spend base. The essential question is what counts as spend.
Ask whether the calculation includes platform credits, refunds, taxes, technology charges or media purchased through another supplier. Establish whether the fee uses planned expenditure or actual billed expenditure, and how discrepancies are reconciled.
Also ask what additional service accompanies a higher fee. Increasing a budget does not, by itself, explain an increase in account-management work.
Project, hourly and performance arrangements
Project fees can make sense for an audit, account rebuild or measurement implementation. Require deliverables, acceptance criteria and a handover process. For hourly work, request approval controls and activity reporting.
Performance fees need especially careful definitions. Agree the source of truth, attribution rules, treatment of cancellations and returns, and responsibility for lead quality. Revenue attributed by an advertising platform is not automatically incremental revenue caused by the agency.
Our guide to paid media agency fees and proposal comparisons provides a broader framework for evaluating these arrangements.
Separate advertising spend from the cost of operating it
Ask each bidder to complete the same cost schedule:
- **Platform media:** the advertising expenditure and who receives the platform invoice.
- **Agency management:** recurring fees, included responsibilities and scope limits.
- **Onboarding:** account audits, migration, restructuring and initial setup.
- **Creative production:** copy, design, video, variants and usage rights.
- **Measurement:** analytics configuration, conversion tracking and customer-data connections.
- **Technology:** reporting tools, feeds, verification or other third-party services.
- **Tax and currency:** whether quoted charges include tax and how foreign-currency costs are handled.
- **Exit costs:** notice obligations, asset transfer and any paid handover work.
Request both the launch-period commitment and the ongoing commitment. A low recurring charge can obscure substantial setup or production costs.
If the requirement is mainly search advertising, compare PPC agencies against that narrower scope rather than paying for a broader channel service you do not need.
Treat minimum budgets as proposal conditions
An agency’s minimum advertising spend, minimum management fee and minimum overall commitment are different things. Ask which threshold it means and obtain the answer in writing.
A proposed media threshold should have an account-specific rationale: the audience, likely auction conditions, conversion objective, geographic coverage and amount of testing required. Ask the agency to explain its assumptions rather than presenting its commercial minimum as a platform rule.
Useful questions include:
- Which channels and campaigns would launch within this budget?
- What would be deferred rather than spread too thinly?
- Which business outcomes can actually be measured?
- What evidence would justify increasing, holding or reducing spend?
- What happens to management fees if advertising is paused?
For a supplier whose minimum is absent from its own published materials, record it as **not published** and identify the pricing or service page checked. Do not replace a missing figure with a market estimate.
A focused paid media agency brief helps suppliers explain those conditions against the same commercial objective.
Put national advertising figures in the right context
Historical market figures demonstrate the scale of UK digital advertising, but they are not agency price benchmarks. IAB UK reported:
- **£23.5 billion** in UK digital advertising expenditure for **2021**, as originally published in its Digital Adspend report.
- **£26.1 billion** for **2022**, as originally published in the following Digital Adspend report.
- **£29.6 billion** for **2023**, as originally published in its Digital Adspend report.
These are historical annual expenditure totals, not current agency quotes. They do not establish what your organisation should spend, what management should cost or whether a supplier’s minimum is reasonable. Use the reports’ definitions and methodology when interpreting the series, rather than treating it as a measure of agency fee inflation.
For broader sourcing context, see our UK marketing and branding agency market guide.
Require clear disclosures before signing
Platform costs and management charges
For Google Ads work, Google’s third-party policy requires third parties to disclose management fees, inform new customers in writing before the first sale and disclose the fees on customer invoices. It also requires reporting that distinguishes the actual amount charged by Google from third-party fees, as explained in Google’s third-party policy.
That is a platform policy, not a universal statement of UK law or proof that every agency follows the same practice. For other channels, request equivalent clarity in the contract rather than assuming the Google requirements apply.
Commercial relationships and control
Ask bidders to disclose rebates, referral payments, reseller arrangements, proprietary technology charges and markups that could affect recommendations. Establish whether any benefits are retained by the agency or passed to you. Treat this as a procurement requirement unless a specific applicable rule has been identified.
Agree who controls advertising accounts, billing profiles, analytics, audiences and creative assets. Where technically available, request direct access to platform billing and performance records. Put access and transfer obligations in the contract rather than relying on an informal promise.
Compare proposals on a common basis
Before appointing a supplier, reconcile the fee schedule with the scope, measurement plan and exit terms. Ask each agency to explain exclusions and budget assumptions in plain language.
The strongest proposal is not necessarily the cheapest. It is the one that makes the total commitment understandable, connects work to your commercial objective and lets you verify where the money goes.