MANAGEMENT

Detailed explanation-1: -Markups usually range from 17.65 to 20 percent and are added to the client’s overall bill. Since suppliers of these services do not allow the agency a commission, percentage charges cover administrative costs while allowing a reasonable profit for the agency’s efforts.

Detailed explanation-2: -In advertising, the commission method of compensation is the traditional compensation method whereby advertising agencies have been paid on the basis of a percentage of the cost of media time and/or space they purchased for a client.

Detailed explanation-3: -The fee charged by an agency for designing and placing advertisements. Historically, this was calculated as a percentage of the amount spent to purchase space or time in the various media used for the advertising.

Detailed explanation-4: -Dealing with Production Costs In those cases, the standard practice is to add 17.65 percent to those costs on your bill. For example, if the voice talent for a radio ad were paid $85, you would be billed $100 (17.65 percent of 85 is 15). The $15 difference is the agency commission.