Your Agency Is Taking a Cut of Your Ad Spend. Stop Letting Them.

Ten percent of your Google budget. Eight percent of your Meta spend. Six percent, if they’re feeling generous.

The logic, as it gets sold to you, is that this aligns everyone’s incentives. The agency wins when you win. You spend more, they earn more, and presumably that more is justified by better performance.

The agency earns more whether or not performance improves, though. They earn more if your cost-per-lead doubles. They earn more if your campaigns are borderline useless. The only thing they need from you is continued spend, and the one thing percentage-based pricing structurally cannot do is give them a reason to tell you to spend less.

That’s not a cynical reading of the situation. It’s just what the incentives produce.

The number that should bother you

Take a mid-sized Irish company: a financial services firm, a retailer with serious e-commerce ambitions, a SaaS business trying to grow outside the domestic market. Realistic monthly Google Ads spend for that kind of business sits somewhere between €15,000 and €40,000. Call it €25,000. Their agency is on 12%, so the monthly fee is €3,000. Doesn’t sound outrageous. The invoice arrives, the budget gets approved, nobody looks too closely at what’s underneath.

Then you look at how the budget is actually split.

A not-unusual scenario: 15 to 20% of total spend going on branded search terms. The company’s own name. Keywords that users type when they’ve already decided they want this company and are just looking for the quickest way to the website. On a €25,000 monthly budget, that’s up to €5,000 a month on a campaign that mostly captures demand that already existed. The agency collects €600 of its fee just for running that.

The pitch for branded search is usually some version of “protecting your brand”: stopping competitors from bidding on your keywords, maintaining control of the bottom of the funnel, keeping your Quality Scores healthy. There’s a version of this argument that holds up under scrutiny. But scrutiny is harder to apply when the person making the argument earns more if you agree with them.

Spend goes up, fees go up. Spend comes down, fee comes down. You can dress that up in whatever language you like, but it’s a conflict of interest with a monthly invoice attached.

The technology pitch

When agencies justify percentage-based fees, the conversation usually eventually arrives at technology: proprietary platforms, exclusive data feeds, automated bidding systems so sophisticated that the fee is effectively buying access to something unavailable elsewhere.

It doesn’t exist in a form that justifies the premium.

Google Ads and Meta Ads run on platforms that are identical for every agency in the market. The auction logic, audience tools, campaign structures, reporting dashboards: the same for a two-person shop in town as for a SaaS company with offices in London and New York. What differs is the quality of the people using those platforms, and the quality of the people has nothing to do with the pricing model. A sharp strategist on a flat fee is better value than a mediocre one on a percentage. The fee structure doesn’t make anyone smarter; it just changes whose interests they’re quietly optimising for.

The bigger agencies will also sell percentage-based pricing on the basis of integration: your digital spend is connected to your offline activity, your TV, your OOH, everything runs through one partner who sees the full picture. There’s a version of this that sounds compelling in a boardroom. In practice, it’s a mechanism for consolidating budget under one roof and making it harder to leave. The more of your spend an agency touches, the more leverage they have when contract renewal comes around. Integration is real, and cross-channel thinking has genuine value. Using it as a justification for taking a percentage of every euro that moves is a different thing entirely.

The World Federation of Advertisers has pressed on this for years. Their guidance on agency remuneration is clear that percentage-of-spend arrangements create structural conflicts that contractual good intentions can’t fully resolve. The problem isn’t that the agency is dishonest. It’s that the model makes honesty financially costly for them.

What it looks like at scale

Step up to a larger Irish advertiser: a national retailer, a financial institution with serious digital acquisition budgets, a company running multi-channel campaigns across Google, Meta, and LinkedIn. Monthly digital ad spend in the €80,000 to €150,000 range is not unusual for that tier. At 10% of spend, the agency fee is €8,000 to €15,000 a month. At 12%, you’re looking at nearly €18,000 on the top end.

Now ask what changed between an €80,000 spend month and a €150,000 one. The campaigns got bigger. More budget moved through the platform. The agency’s tools didn’t get more sophisticated. Their team didn’t work proportionally harder. The reporting didn’t take twice as long. The fee went up because the number in the brief went up.

Meanwhile, on Meta, research published by the IAB Europe consistently shows that a meaningful proportion of performance campaign budgets, sometimes 20 to 30%, goes to placements with limited measurable return when campaigns aren’t being actively managed and challenged. An agency on a percentage deal has no structural incentive to flag this. An agency on a fixed fee, whose retainer is being evaluated against results, does.

The IPA’s remuneration guidance has made the case for outcome-aligned fee structures for a long time. If you want an agency to act in your interest, don’t build a model where acting in your interest costs them money.

The one exception worth acknowledging

There is a scenario where a small additional fee on top of management work is defensible: when the agency is the one paying the media spend on your behalf.

Some agencies act as a kind of bank, fronting the cost of your Google and Meta budgets and invoicing you afterwards. There’s a cash flow risk in that arrangement, and a nominal fee to cover it is reasonable. It’s not the same thing as a percentage of spend, and it’s a fraction of what most percentage models charge. If your agency is billing you 10 or 12% every month and they’re not fronting your media costs, that justification doesn’t even apply.

With Friday Agency, you pay your ad spend directly to the platforms. Google bills you. Meta bills you. We charge a flat fee for the work. There’s no float, no percentage, no invoice that grows automatically every time the budget does.

The branded keywords conversation

Branded search deserves its own moment because it’s where the percentage model is at its most brazen.

To be clear… branded search can be worth running, and we recommend it to clients ourselves. If you’re in a category where competitors are actively bidding on your name, financial services, insurance, travel, utilities, anything with serious price-comparison traffic, showing up in paid results for your own brand is a straightforward defensive decision. Type your company name into Google right now. If a competitor’s ad appears above your organic listing, the conversation about branded spend starts immediately.

But the decision should start with what’s actually happening in the auction, not with a default recommendation to protect budget across the board. Google’s own documentation is nuanced on this, and rightly so. The case is entirely context-dependent. A niche B2B software company with no meaningful competitors bidding on their name is in a completely different position from a mortgage broker in a market where every lender in the country is buying each other’s keywords.

The question is whether the agency recommending branded spend has looked at the auction data and seen genuine competitive activity, or whether they’re working from a default playbook that happens to be worth 15% of your fee with very little active management required. On a percentage model, you cannot reliably tell which one is driving the recommendation. On a fixed fee, the agency has nothing to gain from the distinction, so they make it honestly.

How the conversation should go instead

A fixed fee. That’s it.

You agree scope. You agree a monthly retainer based on the actual work: strategy, campaign management, creative iteration, reporting, the hours that the people involved are genuinely putting in. You define KPIs tied to business outcomes rather than spend volume. You review them honestly, with an agency that has something to lose if they’re not being met.

If the right call in a given quarter is to reduce spend in a particular channel and redirect elsewhere, that conversation is now possible. The agency’s fee doesn’t collapse because you made a smart decision about the budget. If a campaign type isn’t working, it’s in everyone’s interest to say so rather than quietly running it another three months because the percentage keeps ticking.

And switching to this model doesn’t require a long procurement process or a painful transition. It can save you money from the first invoice, regardless of what your current spend is. The businesses that feel it most immediately are the ones spending €50,000 a month or more, where the gap between a fixed management fee and a percentage of spend is a significant number every single month. But even at €10,000 a month, the difference adds up over a year.

This is how Friday structures PPC and paid advertising work: fixed fees, defined deliverables, no percentage arrangement quietly growing alongside your budget. It’s also how we approach digital marketing strategy more broadly, starting with an honest audit of where the money is going, what it’s returning, and whether the current setup is built around your business or around someone else’s margin.

One more thing about the pitch

Most agencies, when pushed on percentage-based pricing, will say it’s industry standard. And they’re right that it’s common. Common and correct are different things, and in this case, common exists not because it’s the most logical model for clients, but because it’s the most convenient one for agencies.

The pitch will mention alignment. It will mention shared risk. It may mention, if you’re dealing with a particularly confident salesperson, that this is how all the major holding companies operate, as if the operational choices of WPP are a reliable guide to what’s best for an Irish business with a €30,000 monthly digital budget.

None of it changes the arithmetic. Ask what the fee would be if the spend stayed flat but the leads doubled. Ask what the fee would be if the spend halved because a smarter channel mix was found. Ask whether, structurally, the agency’s monthly revenue goes up or down when your campaigns improve in efficiency.

The answers tell you everything.

Moving to a fixed-fee model with Friday could save you money from day one, no matter what your current ad spend is. Talk to us, and we’ll show you exactly what the numbers look like.