My little startup advertising agency is trying to shake up the ad agency industry, and instead of taking a commission for buying media and doing the strategy, we plan to take zero. Instead, we want to be remunerated on performance only. In my mind this makes sense as why should anyone take money for their expertise when their expertise may not work? On top of that, start-ups need to be largely performance based.
So the question becomes, what are you prepared to pay as a bonus for performance, if there are no upfront fees? 10%, 15%, 20%? As I would be absorbing risk, I would want to make more money than the usual commission fees, but would what be a good model for this? Could it be something like you say what your CPA target is, and if we get below this then we keep the difference? Help please!