how ad agencies make money

Adrian Jenkins FCA, Director, Financial Progression Limited.

‘Half the money I spend on advertising is wasted. Trouble is, I don’t know which half.’

Adrian Jenkins knows where it goes. John Wanamaker, pioneer of modern advertising and marketing techniques, famously hated budgetary black holes. Here at Financial Progression we’re not huge fans of unproductive marketing spend either. Adrian Jenkins and his expert team of finance professionals work with global brands like yours to ensure exemplary budgetary behaviour and contractual compliance Read More

9 things you really need to know before doing an exit audit

Very often the first piece of work we do for a brand is an exit audit after it has parted company with an agency. Here we look at what you really need to know before doing an exit audit. We’ve completed many exit audits over the last five years. Not unsurprisingly, there are a set Read More

Did you really want to give your agency a golden goodbye?

If you’re thinking of changing agencies, it pays to do a bit of financial housekeeping before you wave them off. When you serve notice on an agency, it’s amazing how quickly everyone takes their eye off the ball. A well-known brand asked us to carry out an exit audit of a PR agency. The spend Read More

Is the top agency talent working on your business? Or on someone else’s?

When you change the agency’s fee structure, how do you know you’re still getting the same quality of staff on your account? In conversation with the Marketing Procurement Manager at one of our long-standing clients, it became apparent that the Head of Media had recently left the business. This meant that, for the first time, Read More

‘It’s in the contract, so it must be happening. Right?’

A major brand discovers that if you don’t look, you could be in for some surprises. As a brand working with an agency, there are some fundamental things you expect to happen: output that meets your expectations, fees to be charged as agreed, reconciliations to be performed regularly. We were approached by a well-known global brand Read More

‘Audit my agency? Dare I even look?’

With agency relationships, a golden rule is: If you’re not checking, you can’t know what’s actually going on. A large FMCG approached us after having a number of conversations about costs with one of its agencies, which simply did not seem to make sense. As a result it started to wonder whether it was being Read More

‘Sorry, our contract says you can’t see that.’

If there are more words governing audit rights than in the rest of the commercial agreement, it’s worth asking why. We were approached by a global retailer who wanted reassurance that its multi-million pound annual contract with its lead creative agency in the UK had been implemented as written. Following our initial review of the Read More

How accurate are your agency’s time sheets? Do you really know?

We all know that most agencies use time sheets to support the fees charged to their clients. How accurate are they, though? I recently had a very interesting conversation with a Marketing Director who had worked at an agency earlier in his career. The Marketing Director told me that he never trusted the time sheets Read More

How exactly do marketing agencies make money?

Like many businesses providing services, marketing agencies make money by selling the time of their people. Take a fully-loaded salary cost and mark it up by an amount sufficient to cover overheads and make an economic profit. The more of an individual’s time that can be billed to clients, the more money the agency makes and Read More

Hide and seek: The game of audit clauses in agency contracts

When you’ve audited as many commercial marketing contracts as we have, it would be fair to say that we’ve seen a very wide range of audit clauses — from nothing through to documents which are separate to the main commercial contract, and are even longer and more detailed! A good audit clause should allow a Read More

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