Every founder opens with the same question. "What's your fee?"
And every founder is surprised by the answer: it depends which model we run.
There are four mainstream commission models in India. The gap between them isn't a few percent. It's whether you're paying for effort or for outcomes.
Below: all four models, the real rupee ranges you'll be quoted, who each one favours, and what to negotiate before signing.
We run a performance-based agency, so we have a stake in this. We'll say plainly which model we use and why. The point is that you walk into any contract conversation knowing exactly what you're being asked to pay for.
The commission model is the most important contract clause you'll sign with an agency. It decides whether the agency gets paid for showing up or for moving your numbers.
Model 1 — the flat retainer
The oldest model there is. You pay a fixed monthly fee, invoiced upfront. The agency commits to a defined scope.
Typical scopes: manage paid ads on Meta and Google. Publish 12 blog posts. Produce 30 social posts and 4 reels.
Typical INR range
Rs. 50,000 to Rs. 5,00,000 per month for full-service paid acquisition. Rs. 25,000 to Rs. 1,50,000 per month for content-only or social-only retainers. Boutique strategy retainers from senior practitioners can run Rs. 2-8 lakh/month.
Who it favours
The agency. Their revenue is predictable and their fee is disconnected from your results. That isn't dishonest. It's just tilted toward their stability. You carry 100% of the performance risk.
When it makes sense
Brand-building, content production, SEO, community management, and any work where you can't draw a clean line from "this thing the agency did" to "this revenue event in our books." If you can't measure it, paying on results is impossible to structure fairly.
Model 2 — percentage of ad spend
The most common structure for paid ads in India. The agency takes a percentage of your monthly ad spend.
Spend Rs. 3,00,000 a month at 12%, and they invoice Rs. 36,000.
Typical INR range
10–20% of monthly ad spend, and the percentage should fall as your budget rises.
Under Rs. 1 lakh a month, expect 15–20% or a flat minimum. Above Rs. 10 lakh, you should be negotiating down to 7–10%.
Below Rs. 1 lakh, most will quote a flat Rs. 25,000–40,000 instead, because servicing a small account doesn't cost them proportionally less.
Who it favours
Roughly neutral, but the alignment is weak.
Here's the flaw. They earn more when you spend more — whether or not that spend worked. Nothing in this model rewards them for lowering your costs. It only rewards them for keeping the account spending.
When it makes sense
Established accounts with mature campaigns, where the agency's job is steady-state optimisation rather than aggressive growth. Also reasonable for early-stage accounts where there isn't enough conversion data yet to structure a true performance deal.
Model 3 — revenue share
They take a percentage of revenue above an agreed baseline.
Say the deal is 12% of monthly revenue above Rs. 5,00,000. Revenue lands at Rs. 8,00,000. They earn 12% of the Rs. 3,00,000 difference — Rs. 36,000.
Typical INR range
8–15% of revenue above the baseline for ecommerce and D2C.
Set the baseline as your average revenue over the 3–6 months before they started. That way they only earn on growth they can actually claim.
Who it favours
Both of you, when it's set up properly. Revenue stays flat, you pay nothing. They earn in proportion to the growth they create. The risk is real on both sides — which is exactly why it works.
When it makes sense
Ecommerce, D2C, app businesses with in-app purchases, and anywhere you have clean conversion tracking and a stable revenue baseline. Doesn't work for businesses with very long sales cycles (where the agency's contribution to a revenue event months later is hard to attribute) or for very seasonal businesses (where the baseline calculation gets gamed by both sides).
Revenue share works because the agency loses money when you don't grow. That is what makes the model self-policing.
Model 4 — pay-per-result
They charge per qualified outcome. Per lead, per booking, per purchase, per install. Rate agreed before work starts.
You fund the ads separately. The management fee disappears entirely and is replaced by the success fee.
Typical INR range
Highly vertical-specific. Rs. 200-500 per qualified B2C lead in high-volume verticals (insurance, edtech). Rs. 800-2,500 per qualified lead in considered-purchase verticals (real estate, healthcare, B2B services). Rs. 12-30 per app install in price-conscious app verticals, Rs. 40-90 per install in high-LTV app verticals (fintech, B2B SaaS apps). Rs. 150-400 per ecommerce purchase as a flat success fee.
Who it favours
You — provided the definition is tight. They carry all the execution risk and only earn when results land.
The catch: if "qualified lead" is written loosely, they'll optimise for submissions that technically count and practically don't.
When it makes sense
High-volume B2C lead generation, app installs, and any vertical with a clean conversion event that can be defined tightly enough to avoid gaming. Less common for ecommerce because it shifts cash-flow timing in awkward ways for the agency.
The four models — head to head
| Model | Typical INR Range | Risk Bearer | Best For |
|---|---|---|---|
| Flat Retainer | Rs. 50K–Rs. 5L/month | Client (100%) | Brand, content, SEO |
| % of Ad Spend | 10–20% of spend | Client (mostly) | Mature paid accounts |
| Revenue Share | 8–15% above baseline | Both parties | Ecom, D2C, in-app purchases |
| Pay-Per-Result | Rs. 200–2,500/lead | Agency (mostly) | B2C leads, app installs |
| Hybrid | Reduced base + commission | Shared | Mid-size accounts (Rs. 5L+ spend) |
The hybrid model — what most real engagements look like
Above a certain size, almost every serious agency in India runs a hybrid.
A small base of Rs. 25,000–50,000 a month covers account management, reporting, creative and meetings. Then a performance commission on top captures the upside.
Why it exists: pure pay-per-result leaves the agency funding 30–45 days of work before invoicing. Pure retainers don't align anyone. The hybrid splits the difference.
Spending over Rs. 5 lakh a month? A hybrid is what you should be quoted. If someone quotes a pure retainer at that size, ask why.
Red flags — when an agency's commission structure is off
- They won't put the structure in writing before a call.A fair model survives being read cold. Hiding the rate behind "let's discuss on the call" usually means it needs a sales pitch to defend.
- The rate doesn't bend with account size.15% on a Rs. 10 lakh account is Rs. 1.5 lakh a month for management. That is not ten times the work of a Rs. 1 lakh account. Rates should fall as budgets rise.
- A commission with no attribution method."12% of revenue we generate" means nothing on its own. Last-click? First-click? Data-driven? The same campaign shows three different revenue numbers depending on which you pick.
- Pay-per-lead deals without a tight lead definition."Qualified lead" needs to be a single, falsifiable definition — "person who confirmed budget on a 15-minute call," not "person who submitted an email." Loose definitions mean the agency optimises for submissions, not real prospects.
- A long lock-in attached to a commission deal.Confidence looks like a 3-month opening term. A 12-month minimum on a performance model is the agency hedging against its own results.
What to negotiate before signing
Five clauses to clarify in writing before any commission-based engagement:
- Attribution methodology — exactly which clicks, conversions, or revenue events count toward the commission, and which platform's data is the source of truth (GA4, Meta, Shopify, your CRM)
- Baseline calculation — for revenue-share deals, how the baseline is calculated, how often it's revisited, and what happens during seasonal swings
- Lead/install/purchase definition — for pay-per-result deals, the exact qualifying criteria and how disputes are resolved
- Direct ad account access — your ownership of the Meta Business Manager and Google Ads accounts, with the agency added as a user. Never the reverse.
- Termination terms — initial term length, notice period, and what happens to in-flight campaigns when the engagement ends
Frequently asked questions
In closing
The right marketing agency commission model isn't universal — it's a function of what you're trying to grow, how cleanly you can measure it, and how much risk you want the agency to share. Brand and SEO will always make sense as flat fees. Paid acquisition and lead generation almost always make more sense on commission or hybrid terms.
If you're spending more than Rs. 2 lakh/month on paid acquisition with an agency on a flat retainer, the model itself is probably costing you more than the fee suggests. The same money split as a hybrid — small base plus revenue share — usually gets you a more attentive agency for the same total spend, because the variable component pulls them toward your numbers.
At GUROB, we run hybrid commercial terms for app marketing, B2C lead generation, and ecommerce growth. The base covers our overhead, the variable rewards the outcome. If you want to see what the math looks like for your specific account, the private audit (free) walks through your current numbers and the structure that fits.