A brand spends €100,000 on retail media through their agency. The RMN invoices
€100,000. The agency takes a 15% commission. The RMN receives €85,000.
If the RMN's P&L forecast assumed €100,000 in revenue, it's 15% wrong. If the error compounds across dozens of agency deals, the revenue forecast is fiction. The operations budget is wrong. The margin calculation is wrong. The business decisions built on those numbers are wrong.
This sounds obvious. And yet, new RMNs make this mistake constantly.
How agency economics work
Agencies typically earn commission on media spend, a percentage of the gross investment that flows through their buying. The commission is either:
Deducted from the payment. The brand pays the agency €100,000. The agency pays the RMN €85,000 and retains €15,000 as commission.
Added on top. The brand pays €115,000 total, €100,000 to the RMN and €15,000 to the agency. (Less common in practice.)
Commission rates vary: 10-20% is typical for media buying, with some variation by market and relationship.
The implication: the RMN's revenue per campaign is always net of agency commission.
Gross booking (what the brand approves) minus commission equals net revenue (what the RMN actually receives).
Why this matters for planning
Revenue forecasting. If the pipeline shows €2 million in agency bookings, the actual revenue is €1.7 million (at 15% commission). Plan operations, headcount, and investment against the net number.
Margin calculation. Cost-to-serve should be calculated against net revenue, not gross.
A campaign that costs €20,000 to deliver on €100,000 gross looks like 80% margin. On
€85,000 net, it's 76% margin. The difference matters at scale.
Rate card design. When setting CPMs, account for the agency take. If the target net
CPM is €12, and the agency commission is 15%, the gross CPM needs to be €14.12.
JBP rebate math. Volume rebates calculated on gross bookings need to be evaluated against net revenue. A 10% rebate on €500,000 gross is €50,000, but the net revenue before rebate was only €425,000. The effective rebate rate on net revenue is 11.8%, not 10%.
The transparency imperative
Be clear internally about which numbers are gross and which are net. Every report, every forecast, every dashboard should specify.
Externally, brands see gross numbers (their total investment). Agencies see gross numbers (the basis for their commission). The RMN's finance team must see net numbers (actual revenue received).
Mixing up gross and net is how businesses surprise themselves with lower margins than expected. The surprise is never pleasant.
The bottom line
If you don't account for agency rebates, your forecast is fiction. Your P&L will surprise you.
Revenue is always net. Plan net. Forecast net. Calculate margins on net. Design rate cards knowing the net reality.
It's not complicated. It's just the discipline of knowing which number is real, and making sure every decision is built on the real number.
Related Reading
- Pricing by Objective: Why Awareness CPM Is Cheaper Than Sales CPM
- Media-to-Sales Attribution: The Proof That Changes Procurement Behavior
- JBP Rebates: How to Discount Without Destroying Your Rate Card
- AI Will Kill M&Ms in Retail Media
- Sales Insights vs Sales Analytics: The Difference Between a Report and a Product
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