Price a paid media retainer by defining the work, estimating its full delivery cost, and testing a fee against the margin and capacity your agency needs. Ad spend can help describe complexity, but it is not a reliable substitute for scope. A sustainable retainer makes deliverables, revision limits, reporting, and change requests explicit before work begins.
Retainer profitability calculator
Enter one retainer to see its true margin, effective hourly rate, and the hour count at which it stops earning your target margin.
Fully loaded cost of the people doing the work — salary plus taxes, benefits and tools.
Media spend, licences or subcontractor costs you bill on at cost.
- Gross margin
- 51.2%
- Gross profit / month
- $4,100
- Delivery cost / month
- $3,900
- Effective hourly rate
- $133
- Break-even at
- 123.1 hrs
- Target margin holds to
- 61.5 hrs
This calculator runs entirely in your browser. Nothing you enter is sent anywhere or stored.
Start with the work you are promising
List the accounts, channels, campaigns, markets, reporting cadence, creative responsibilities, and expected meetings. Separate initial setup from recurring delivery. Record which tasks depend on the client supplying approvals, assets, or data.
A single-channel account with stable creative may require a different staffing mix from a lower-spend account with several markets and frequent production changes. Estimate hours by role and recurring task, not just by the number of platforms.
Calculate a cost-based planning fee
Illustrative fee = expected direct delivery cost ÷ (1 − target delivery margin).
Direct delivery cost should reflect the labor and outside support used to serve the account. A delivery margin leaves room to cover overhead and profit; it is not itself net profit. Include a consistent allocation of paid non-billable time when calculating loaded hourly costs so you do not price from salaries divided by unrealistic billable hours.
Assume an invented monthly engagement requires 40 specialist hours at a loaded cost of $60/hour and 10 manager hours at $90/hour. Dedicated tools and outside support cost another $300.
| Component | Monthly cost |
|---|---|
| Specialist: 40 × $60 | $2,400 |
| Manager: 10 × $90 | $900 |
| Dedicated support | $300 |
| Direct delivery cost | $3,600 |
At an illustrative 40% delivery-margin target, the planning fee is $3,600 ÷ 0.60 = $6,000. The 40% is a modeling assumption, not a measured industry standard or a recommended price for every account. Validate the fee against customer value, competitive alternatives, risk, and actual capacity.
If delivery hours rise enough to add $1,200 of cost while the fee stays at $6,000, contribution falls to $1,200 and the margin becomes 20%. That is why scope control matters as much as the initial quote. Use the calculator on this page with your own costs and assumptions.
Compare retainer structures
| Structure | Useful when | What needs a clear boundary |
|---|---|---|
| Fixed monthly fee | Recurring scope is stable | Included work, volume, and changes |
| Percentage of media spend | Spend is meaningfully related to responsibility | Minimum fee and services covered |
| Base fee plus variable component | There is a recurring workload plus variable complexity | What triggers the variable charge |
| Separate project plus retainer | Setup or a major change differs from ongoing work | Completion criteria and recurring start date |
Promethean Research’s industry overview describes agencies using multiple pricing approaches. That provides context for choosing a model; it does not supply the right price for a particular engagement. This article is a pricing framework, not a listing of a named competitor's current fees.
Review the economics after delivery begins
Compare estimated and actual delivery hours each month. Check whether extra work came from rework, unclear scope, client delays, or a deliberate service investment. Record the reason before changing a fee or staffing level.
For change requests, identify the new deliverable, timing, owner, and price effect. A documented scope amendment is easier to manage than repeatedly absorbing additional work and hoping the next month will balance it out. The scope-creep guide gives a related way to examine the cost of over-servicing.
Keep client media spend separate from fees in management analysis and confirm the appropriate revenue accounting. See gross versus net agency revenue. Laya’s agency accounting and advisory services can support the reporting and discussion behind pricing decisions; engagement scope is agreed separately.
Frequently Asked Questions
What percentage of ad spend should an agency charge?
There is no single percentage justified by every workload. Estimate costs and scope first, then test whether a percentage model covers the work at both low and high spend levels.
Is the example fee a market benchmark?
No. The $6,000 fee is derived from explicitly hypothetical costs and a hypothetical margin target. It is not an observed average or a quote from Laya.
Should setup be included in the retainer?
Either approach can work if the contract explains it. Distinguish one-time setup from recurring work and show how setup costs are recovered.
Disclaimer: This article is for general informational purposes only and does not constitute financial, tax, legal, or accounting advice. The information provided is not a substitute for consultation with a qualified professional. Consult a licensed accountant, CPA, or financial advisor for advice specific to your situation.