Our fee is flat, scoped in the plan, and it does not move when your ad spend moves. Ad spend goes to the ad platform, from an account in your name, and we take none of it.
The reason is not that percentage pricing is dishonest. Plenty of capable people work that way and disclose it clearly. The reason is that it prices the wrong thing, and once a fee is attached to a budget it becomes very difficult to give advice that lowers the budget.
Work is not proportional to spend. Building a feed, restructuring campaigns, writing product titles that match real searches and setting bid targets from margin all take the same effort whether the daily budget is small or large. Sometimes the smaller account takes more effort, because there is less data and every decision is closer to the edge.
So a percentage of spend charges for something nobody is providing. It charges for the size of your cheque to somebody else.
It puts money on one side of every budget conversation
The clearest problem is what happens when the right answer is to spend less.
Campaigns reach a point where the next unit of spend buys a customer who costs more than they are worth. Recognising that point and stopping is one of the most valuable things anyone managing your advertising can do. Under a percentage arrangement, doing it reduces the fee.
That does not make people dishonest. It makes the conversation harder, and it introduces a small bias into a hundred small judgements: whether to test a broader audience, whether to keep a marginal campaign running through a quiet month, whether to push into a second platform, whether to raise budget going into a peak. Each individually defensible, each nudged in the same direction.
You should not have to weigh advice for a financial interest you cannot see. When we say the budget should come down for a month, the only thing that changes for us is that the report will say we recommended it.
The same logic applies to a percentage of existing sales, which charges more for revenue that was already coming, including repeat orders from customers won long before anyone arrived.
Ask what happens to the fee if your spend halves and your revenue stays the same.
It charges you more precisely when things get harder
There is a second effect that shows up in a bad quarter.
Costs rise in competitive seasons. To hold the same number of orders you spend more, so under a percentage model your fee rises in the month your margins are thinnest. The supplier's income goes up while the store's profit goes down, and nothing about the work changed.
The reverse is also awkward. A store that has a strong period on organic and email, and pulls back on paid, ends up paying less for a month in which there was plenty of work to do, because the work was in the parts that did not have a percentage attached.
A base fee plus growth share behaves like a normal business cost. It is the same number in a good month and a hard one, it can be budgeted for a year ahead, and it does not interact with decisions it should have no part in.
The honest weakness of a base fee plus growth share is the mirror image: if the work turns out lighter than scoped, you pay the scoped amount anyway. That is why the scope is written down before you agree to it, and why the arrangement is month to month.
It quietly punishes efficiency
Think about what good work actually does to an ad account.
A rebuilt product feed makes ads show for searches that match the product, which raises relevance and usually lowers what you pay for a click. Better product pages raise conversion rate, so the same spend buys more orders. Removing products with no margin from a campaign cuts wasted spend. A better bidding target stops the account buying its own returning customers at a premium.
Every one of those is a reduction in spend for the same or better result, and under a percentage model every one of them cuts the fee. The work that makes advertising efficient is the work that pays the supplier least.
Meanwhile the easiest way to raise the fee is to spend more, which any account can do at any time.
We would rather be paid for the feed, the pages, the structure and the targets, and let the spend go wherever the numbers say it should. If our work means you can hold your revenue on a smaller budget, that is a success, and it should not cost us anything to say so.
It distracts from the two numbers that matter
Percentage pricing tends to drag the conversation towards budget size, which is the least interesting question in paid advertising.
The two numbers that decide whether advertising works for a store are what a customer costs to acquire and what a customer is worth. The first comes from the campaigns, the second comes from margin, order value and repeat purchases. When the second is bigger than the first by enough to cover overheads, spending more is usually right. When it is not, no amount of campaign management fixes it.
That framing sends attention to unglamorous places. Margin by product line, because it decides what you can afford to pay. Average order value, because raising it raises the ceiling on acquisition cost. Repeat rate, because a customer who returns is worth more than one who does not, and that changes the budget you can justify.
A fee tied to spend has no interest in any of that. It is interested in one input. Our fee is tied to a scope covering all four levers, which is why the plan looks at margin and repeat rate before it recommends a budget.
The counter-arguments, taken seriously
There are reasonable defences of percentage pricing and it is worth stating them properly.
The first is that larger accounts do take more work: more campaigns, more markets, more products, more reporting. That is true, which is why our fee accounts for volume directly. Products, markets, channels and order counts all change the scope. The difference is that we price the work the volume creates rather than the budget itself.
The second is alignment: if the agency earns more when you spend more, and you only spend more when it works, incentives point the same way. The flaw is the middle step. Stores spend more for many reasons, including inertia, seasonal panic and a supplier's recommendation, and the model rewards the spend regardless of the result.
The third is simplicity, and it is genuine. A percentage is easy to quote without understanding the business. We would rather spend the time understanding the business, which is what the free plan is for.
None of these persuade us, but a store choosing between suppliers should hear them rather than a caricature.
How to check any pricing model in five minutes
Whoever you are talking to, four questions will tell you what the fee is really attached to.
What happens to your fee if I halve my spend next month and keep my revenue the same. If the answer is that the fee halves, the fee is attached to the budget, not the work.
What happens to your fee if I double my revenue with no change in spend. If it rises, you are paying more for work that did not change.
Whose name is on the ad account, and what happens to the conversion history and audiences if we part ways. Accounts should be in your name so the data stays with you.
What is the scope, in a list I could hand to someone else. A fee with no list behind it cannot be checked against anything.
Our answers: the fee does not change with spend or with revenue, the accounts are yours throughout, and the scope is on page two of the plan with the price on page four. Month to month, so if the arithmetic stops making sense you can stop.