Here’s a question that’ll change how you think about your marketing agency: what happens to their fee when you spend more on ads?
For most agencies, the answer is simple. They earn more. And that one detail sits at the heart of a conflict of interest the industry would rather you never noticed.
I’m Mal Simons, and after 20+ years in the digital and ecommerce world, I’ve watched this play out more times than I can count. Smart business owners handing over budgets, trusting the numbers, and never realising their agency was quietly rewarded for one thing above all else – getting them to spend more.
In this post, I’ll break down how the commission model actually works, why it’s so widespread, the very real damage it does to your bottom line, and how we scrapped it entirely at Hot Dog Solutions. Let’s get into it.
How The Commission Model Actually Works
The traditional agency model is beautifully simple – for the agency.
You hand over a media budget. The agency spends it on your behalf across Google, Meta, or wherever else. And then they charge you a percentage of that spend on top of their fee. Usually somewhere between 10% and 20%.
So if you spend £10,000 a month on ads, your agency pockets a slice on top. Spend £20,000, and their commission fee doubles. Nice work if you can get it.
Now here’s the part nobody says out loud. The agency’s income is tied to your spend, not your success. The more money flows through the account, the more they make – regardless of whether that spend actually turns into sales.
Read that again. Their pay-day grows when your budget grows. Your results barely enter the equation.
Why This Model Is Everywhere
If it’s so lopsided, why is it the industry standard? A few reasons.
First, it’s easy. Charging a percentage of spend requires no clever thinking about outcomes. It’s a simple sum on a simple invoice.
Second, it scales beautifully for the agency. As your business grows and your budgets climb, their revenue climbs right alongside – with almost no extra effort on their part.
Third, and this is the big one: it’s been around so long that most business owners assume it’s just how things are done. It’s baked into the fabric of the industry. Nobody questions it because nobody talks about it.
That silence is exactly the problem.
Why It’s A Problem For Business Owners
Let me be blunt. When your agency earns more the more you spend, their incentives and yours are pulling in opposite directions.
You want efficiency. You want every pound, dollar or Euro working hard, driving real sales, delivering genuine return. Your agency, meanwhile, is quietly incentivised to grow the budget – because that’s how they get a raise.
They’re not necessarily villains. Most agency people are decent, hardworking folk. But the model itself rewards the wrong behaviour. And over time, incentives shape actions, whether people mean them to or not.
So instead of a partner obsessed with your growth, you end up with a partner obsessed with your spend. Those are very different things.
What This Looks Like In The Real World
This isn’t theory. Here’s how it shows up in practice, and you may recognise a few of these.
- Bloated ad budgets. “You need to spend more to compete.” Sometimes true. Often just a nudge to grow the number their fee is based on.
- Vanity metrics. Reports stuffed with impressions, reach, and clicks – numbers that look impressive but never made it to your bank account. Impressions don’t pay the bills. Sales do.
- Reluctance to cut waste. Spotting an underperforming campaign and switching it off means a smaller budget. Which means a smaller fee. So it quietly stays on.
- “Always more” recommendations. New channels, bigger tests, higher budgets – every conversation somehow ends with you spending more, rarely with you spending smarter.
I’ve sat across the table from business owners who were pouring tens of thousands into ads every month, convinced it was working, simply because the reports were colourful and the meetings were confident. Dig into the actual sales figures, though, and the story fell apart.
That’s the trap. The model doesn’t reward honesty about what’s working. It rewards more.
How We Scrapped It At Hot Dog Solutions
When I started HDS, I did it to fix the agency model, not repeat it. So we tore up the commission playbook completely.
We don’t take a cut of your media spend. Full stop. That single conflict of interest – the one that quietly poisons so many agency relationships – simply doesn’t exist here.
Instead, we work on a pay on results basis. Our success is tied directly to yours. When you win, we win. When you don’t, we don’t get to hide behind a pretty report and a fat retainer.
That changes everything about how we behave.
- We hunt down waste instead of protecting it, because trimming a budget that isn’t working is good for you – and therefore good for us.
- We obsess over the numbers that actually matter: sales, conversions, real return. Not vanity metrics that flatter the invoice.
- We’ll happily tell you to spend less if that’s the smart move, because our reward comes from your growth, not your budget.
It takes confidence to work this way. You only offer pay-on-results if you genuinely back yourself to deliver. We do – which is exactly why we can put our money where our mouth is. In the UK, we’ve driven returns of £18 for every £1 spent, and 20:1 across the US and Canada. Those numbers come from alignment, not accident.
Key Takeaways
Here’s what to hold onto:
- Most agencies earn more when you spend more – their incentives aren’t aligned with your results.
- The commission model is everywhere because it’s easy and profitable for agencies, not because it’s good for you.
- Watch for the warning signs: bloated budgets, vanity metrics, and a strange reluctance to cut waste.
- A pay-on-results model flips the relationship, so your agency only wins when you do.
Let’s Talk
If you’ve ever had the nagging feeling your agency cared more about your budget than your business, you were probably right. And you deserve better.
At Hot Dog Solutions, we’re an extension of your team, tied to your results, and refreshingly honest about what actually works. No commission on spend. No hidden conflicts. Just growth.
If you’re after an agency that only wins when you do, I’d love to hear from you. Let’s build a plan that puts your results first.
Mal Simons, Managing Director, Hot Dog Solutions
