MMM: Margin, Mark-Up, Management Fees

When it comes to media buying, there are three critical Ms that often get overlooked: Margin, Mark-up, and Management Fees. These factors can significantly impact campaign performance, yet they’re rarely discussed openly. At AdtechBro, transparency is at the heart of what we do, so let’s dive into why these three Ms matter so much.

The Problem with High Margins and Mark-ups

Many media agencies charge exorbitant margins—some as high as 40% or more—and it’s not uncommon to see these costs layered on top of additional fees. This practice is not only opaque but also detrimental to a campaign’s success. Here’s why:

• Reduced Scale: Every dollar spent on inflated fees is a dollar not spent on media. This limits the reach and scalability of your campaigns.

• Higher CPAs: Campaigns with excessive management fees often face inflated cost-per-acquisition (CPA) metrics because less budget is allocated to actual ad spend.

  
  

I’ve encountered cases where agencies add undisclosed margins to campaigns they outsource to other vendors. For instance, I’ve seen 40% margins on campaigns entirely managed by the demand-side platform (DSP) or managed by a silent third-party agency/partner. This means that a significant portion of the budget is eaten up before a single ad is served.

The Triple Fee Trap

Early in my career, I witnessed an extreme example of inefficiency:

A client was working with one agency, which outsourced to another agency, both taking a 20% management fee. Neither agency managed the actual campaign; they passed it to us, a a third agency, which also charged a margin. In the end, the campaign had three layers of fees—all at the expense of the media budget. The result? Reduced scale, fewer sales, and skyrocketing CPAs.

What’s Reasonable?

At AdtechBro, we believe in fair and transparent pricing:

• 15% Margin: For full-service campaigns.

• 20% Margin: For complex campaigns requiring additional effort and expertise.

These margins ensure enough budget remains to achieve meaningful results while covering the cost of quality management.

Transparency and Flexibility

We offer clients the choice to structure fees in two ways:

1. Fee Included in Total Spend: This approach provides simplicity and ensures your budget is fully allocated upfront.

2. Fee Added on Top of Spend: This option allows for complete transparency and separates the management fee from the ad spend.
   

Why It Matters

By reducing unnecessary layers of fees and maintaining a fair margin, campaigns can achieve better results:

• Lower CPAs: More budget goes to media spend, driving better outcomes.

• Increased Scale: Campaigns can reach larger audiences without being bogged down by inflated costs.

• Improved ROI: Transparent pricing ensures every dollar is spent efficiently.

Hashtag Transparency

At AdtechBro, we’re committed to delivering performance-driven campaigns without hidden fees or bloated margins. Our approach prioritises your success, not our bottom line. Let’s work together to create campaigns that truly shine.

Interested in learning how our transparent pricing can boost your campaign performance? Reach out to chris@adtechbro.com to find out more!