- Billable rate
- The hourly rate charged for a specific person or title. Typically built from salary plus overhead plus target margin, then negotiated down by procurement against benchmarks.
- Blended rate
- A single averaged rate applied across all roles on an engagement instead of individual title rates. Simpler to sell and to invoice, but it quietly transfers risk: if the actual mix skews senior, the agency eats the difference.
- Rate card
- The published schedule of hourly or daily rates by title and discipline. It is the anchor document in every fee negotiation and the first thing a procurement benchmark attacks.
- Staffing plan / FTE allocation
- The grid showing which titles work on the account and at what percentage of a full-time equivalent. Multiply the grid by the rate card and you have the fee — which is why the staffing plan, not the creative, is what gets argued over in a fee review.
- Scope of work (SOW)
- The contractual definition of what will be delivered, in what quantity, under what assumptions, in what period. A good SOW names deliverables, round counts, approval gates and explicit exclusions; a vague one is an invitation to unbilled work.
- Scope creep
- The accumulation of small unbilled additions — an extra cutdown, one more round, a deck that was never in the SOW — until the account is unprofitable. Managed by change orders and a named person willing to say the word 'out of scope'.
- Retainer vs project vs performance fee
- Three revenue shapes. A retainer buys guaranteed capacity monthly and gives the agency predictable revenue; a project fee prices a defined deliverable and shifts overrun risk to the agency; a performance fee ties part of compensation to agreed business or campaign outcomes. Most modern contracts blend a reduced base fee with an at-risk component.
- Commission model / the 15% media commission
- The historic arrangement in which media owners paid agencies a commission — traditionally 15% of gross billings — for placing advertising. It funded 'free' strategy and creative for decades. Its erosion into negotiated fees is the single biggest structural change in agency economics, and it is why fee-based compensation had to be invented.
- Fee-based compensation (labor fee and cost-plus)
- Paying the agency for its people rather than as a percentage of spend. A labor-based fee prices the staffing plan against rates; cost-plus builds the fee transparently from documented salary and overhead plus an agreed profit percentage, and usually comes with audit rights.
- Value-based compensation
- Tying part of the fee to agreed measures of value created — sales lift, brand health, cost efficiency — rather than to hours worked. Widely admired, hard to implement, because it requires both sides to agree in advance on a metric and a baseline neither fully controls.
- Utilization and realization
- Utilization is the share of a person's available hours booked to client work; realization is the share of those hours actually billed and collected. An agency can be busy and unprofitable if utilization is high and realization is low.
- Agency of record (AOR)
- The lead agency formally appointed for a discipline — creative AOR, media AOR — usually under a multi-year contract with a retainer and first right on assignments. The AOR relationship is deeper and stickier than project work, and the reason review cycles are treated as existential.
- Project-based roster
- The now-common alternative to an AOR: a pre-approved bench of agencies that compete assignment by assignment. It lowers a client's switching cost and raises the agency's cost of sale, since every brief is effectively a small pitch.
- Pitch / RFP
- The competitive process by which agencies are selected: RFI to qualify, RFP for capability and commercials, then presentations. Pitching is expensive, unbilled and time-boxed, so disciplined shops qualify hard and decline reviews they cannot win.
- Chemistry meeting
- The pre-pitch session where the client meets the actual team without formal creative work. Ostensibly about fit; in practice it is where most shortlists are really decided, and where sending the people who will run the business matters more than the deck.
- Spec creative
- Speculative creative work produced unpaid during a pitch. The industry's most-argued practice: clients want to see thinking applied to their problem, agencies bear the cost, and the 4A's has long pushed for paid pitches and limited spec instead.
- Pitch consultant
- A third-party search consultant hired by the client to run the review, screen agencies and benchmark fees. They shape the RFP, the scoring and often the compensation model, which makes them a gatekeeper agencies have to sell to before they ever sell to the client.
- Master services agreement (MSA) and indemnity
- The governing contract that sits above individual SOWs, covering payment terms, IP ownership, confidentiality, termination and liability. The indemnity and liability-cap clauses matter most: an uncapped indemnity for third-party IP claims can exceed the entire fee on the account.
- Rights and usage
- The defined media, territories and time period for which an asset may run. Usage is priced, not assumed: extending a campaign into a new market or a second year without renegotiating talent, music and stock rights is one of the most common and expensive agency mistakes.
- Talent buyout / SAG-AFTRA Commercials Contract
- Performer compensation for commercials, governed for union work by the SAG-AFTRA Commercials Contract. A buyout pays a fixed sum for defined usage instead of ongoing residuals; the choice between buyout and session-plus-residuals changes the production budget materially and must be decided before a shoot, not after.
- Music licensing and stock vs original
- Licensed music requires clearing both the composition and the master recording, for the same media, territory and term as the spot. Original score costs more upfront but is fully controllable and cheaper to extend; production or stock music is fast and cheap but non-exclusive and can turn up in a competitor's ad.
- Work-for-hire
- The contractual arrangement under which work created by an agency or its contractors vests with the client rather than the creator. Clean assignment language up and down the chain — including every freelancer — is what makes an agency able to deliver the IP it promised.
- Transparency and rebates
- Whether the client can see what was actually paid to media owners, and whether the agency receives rebates, credits or free inventory from those owners. Undisclosed rebates were the central finding of the ANA's media-transparency work and are now the standard subject of contract clauses and audits.
- Principal-based media buying
- The agency buys inventory as principal — taking ownership of it at its own risk — and resells it to the client at a marked-up price, rather than acting as the client's agent for a fee. Legal and increasingly common, but the client sees a price rather than a cost, so the arrangement must be disclosed and consented to in the contract.
- Media audit
- An independent review of what was planned, bought, delivered and paid, benchmarked against pooled market data. Audit rights have to be written into the MSA up front, with defined access to buying records, or the audit cannot actually be performed.
- Non-disclosed vs disclosed model
- In a disclosed (agency) model the client sees the actual net media cost and pays the agency a transparent fee. In a non-disclosed (principal) model the client pays a single price and the agency's margin is inside it. The distinction determines who captures buying efficiencies.
- Creative brief
- The one-page instrument that converts a business problem into a creative problem: audience, current belief, desired belief, single-minded proposition, support, tone, mandatories. Most weak work traces back to a brief that contained three propositions instead of one.
- Positioning and brand platform
- Positioning is the space a brand claims in a buyer's mind relative to alternatives; a brand platform is the durable articulation of it — purpose, promise, personality, proof — that campaigns ladder up to. Platforms outlive campaigns and are what stop each new brief from restarting the brand.
- Big idea
- A single organizing thought expressive enough to run across channels, formats and years without being retold each time. The test is not whether it is clever but whether it generates more executions than the ones in the deck.
- Concept testing
- Research on rough creative — boards, animatics, stimulus — before production money is committed. Useful for diagnosing comprehension and branding, notoriously bad at predicting the performance of unfamiliar or emotional work, which is why testing is best treated as a debugging tool rather than a verdict.
- Storyboard and animatic
- A storyboard is the frame-by-frame visual of a film idea; an animatic adds timing, scratch voice and music so a 30-second idea can actually be judged as 30 seconds. The animatic is the artifact clients approve and the one testing is run against.
- Production bid (triple bid)
- Sending the approved board to three production companies for competitive bids on a standard bid form so line items compare. Triple-bidding is the procurement norm; the honest version awards on treatment and director as well as price, and discloses any agency-affiliated bidder.
- Integrated campaign
- A campaign built so each channel does the job it is best at while sharing one idea, structure and identity — rather than one TV script resized for six placements. Integration is an operating discipline: one brief, one lead team, one review.
- Always-on vs burst (flighting)
- Flighting is the scheduling pattern of media over time — continuous, flighted (on-and-off) or pulsed. Always-on maintains low-level presence to capture demand as it arises; burst concentrates spend into short high-intensity periods to force salience. The choice decides whether a modest budget ever reaches effective frequency in any single period or spreads itself below threshold all year; most credible plans use both — a burst to create memory, always-on to harvest it.
- Reach and frequency
- Reach is the share of the target exposed at least once; frequency is the average number of exposures among those reached. Any fixed budget trades one against the other, and the plan's central choice is where on that curve the campaign should sit.
- GRP, TRP, CPM and CPP
- GRPs are reach times frequency against the total population; TRPs are the same against the defined target. CPM is cost per thousand impressions and CPP is cost per rating point. Together they are the currency in which broadcast and cross-channel plans are compared and traded.
- Share of voice and excess share of voice (ESOV)
- Share of voice is a brand's share of category advertising spend. ESOV is SOV minus market share; sustained positive ESOV is the most replicated predictor of share growth in advertising-effectiveness research, and it is the cleanest argument for defending a budget.
- Brand lift study
- A controlled survey comparing exposed and unexposed groups on awareness, consideration and favorability. Offered natively by the large platforms, and the standard way to show a brand campaign did something when there is no immediate sales signal.
- Marketing mix modeling (MMM)
- Regression-based modeling of aggregate historical data to estimate each channel's contribution, including offline and non-digital effects. Privacy-safe because it needs no user-level data, which is why it returned to prominence as cookie-based attribution degraded.
- Incrementality testing
- A designed experiment — geo holdout, ghost ads, randomized control — that measures what would not have happened without the advertising. The only method that establishes causality rather than correlation, and routinely shows lower true impact than last-click attribution claims.
- Attribution
- Assigning credit for a conversion across touchpoints: last-click, first-click, linear, time-decay or data-driven. Structurally biased toward the channels closest to the purchase and toward what is measurable, which is why it is now used alongside MMM and incrementality rather than alone.
- Ad server
- The system that decides which creative is delivered to which impression, and logs delivery, clicks and conversions independently of the media seller. Third-party ad serving is what lets a client verify a publisher's delivery claims and run frequency capping across sites.
- Verification, viewability and brand safety
- Independent measurement of whether an ad was actually viewable (rendered in view for a minimum time), served to a human rather than a bot, and adjacent to acceptable content. Verification vendors are accredited by the Media Rating Council and are a standard contract requirement on programmatic buys.
- Data clean room
- A controlled environment where an advertiser and a platform or retailer match and analyze their data without either exporting the other's user-level records. The main mechanism through which audience matching and measurement survived the loss of third-party cookies.
- Retail media
- Advertising sold by retailers against their own shopper data and closed-loop sales — on their sites, in their apps and increasingly off-site and in-store. It converts a retailer into a media owner, and it takes budget from both trade promotion and traditional media.
- CTV (connected TV)
- Television delivered over the internet through smart TVs, streaming devices and ad-supported tiers. It combines TV-style creative with digital targeting and frequency data, but suffers fragmented reach measurement and duplicated frequency across services.
- Programmatic guaranteed and PMP
- Programmatic guaranteed is a fixed-volume, fixed-price deal executed through programmatic pipes — reserved inventory with automated delivery. A private marketplace (PMP) is an invitation-only auction on selected inventory. Both trade some open-exchange scale for known supply and cleaner brand safety.
- Upfront and scatter market
- The upfront is the annual advance market where advertisers commit to the coming season's television and streaming inventory for guaranteed pricing and audience delivery. Scatter is what is bought later, closer to air, at prevailing rates — cheaper in a soft market, punitive in a tight one.