A performance-based marketing agency gets paid, at least in part, on results: a cut of revenue, a share above a target, or a fee per sale. The idea is simple. The hard part is the number the percentage gets applied to. Meta, Google and your client's payments can give three different revenue figures for the same month, and a fee built on the wrong one turns into an argument by the second invoice. So agree where the revenue number comes from first. Then talk percentages.
The short answer
Performance-based agencies usually charge one of four ways: a commission on the revenue the campaigns are credited with, a share of total store revenue, a share of revenue above a baseline on top of a base retainer, or a fixed fee per sale. Whichever one you pick, settle the revenue source before the percentage. Meta and Google can both claim the same sale, so their totals added together can come to more than the bank shows. The safest base is the payments your client received for the agreed dates, net of refunds, from visits that came through your campaigns.
Agree the revenue number before you agree the fee
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How performance-based agencies usually charge
Most deals are a version of one of these four. Here's who each one suits and where it tends to break.
Commission on credited revenue. The agency takes a percentage of the revenue the ad platforms say the campaigns produced. It suits brands where paid ads drive most sales. It breaks on the word "credited", because the answer depends on whose count you use, and two platforms can count one sale.
Revenue share on total store revenue. The agency takes a cut of everything the store sells. It suits an agency that runs most of the client's marketing. It breaks when other channels grow. One commenter on r/PPC put the question plainly: "What happens if another marketing channel helps bring in a ton of revenue like SEO or email.... why do you get all that increase in revenue?" The same commenter said agencies they know who charge this way are "usually in the 2% - 5% of revenue range" (r/PPC thread).
A share above a baseline or target ROAS. Usually on top of a base retainer. In a March 2026 r/PPC thread, an agency owner weighed two versions: a management fee plus 5% of ad revenue once ROAS clears a threshold, or a management fee plus 10% of revenue above a target ROAS (r/PPC thread). It suits established accounts with a steady history. It breaks on the baseline, because seasonal sales and stock problems move revenue without the agency doing anything.
A fixed fee per sale or per lead. Pay for performance in its plainest form. It suits deals where a sale or a lead is easy to count. It breaks because the agency only controls part of the result. As one commenter in an r/PPC thread about performance-paid agencies put it, "a bad product, bad landing page or bad product pricing will have much impact on the results than SEA work" (r/PPC thread).
How common is performance pricing?
Not very, going by the public numbers. Promethean Research's 2025 Digital Agency Industry Report, which drew mostly on a sample of 1,062 agencies (primarily North American, and skewing toward larger agencies than the market as a whole), says "any model involving Performance-Based pricing appears in just 5% of responses (combined across all mixes)." The same report says 91% of agencies offered retainers (Promethean Research, 2025 report).
Ignition's May 2025 study of 273 agency managers and executives doesn't break out performance pricing in its public summary. Its split: hourly billing 28%, productized or subscription packages 28%, project-based pricing 25% and retainers 10% (Ignition, 22 May 2025).
Search interest tells a similar story. In our keyword pull on 19 Oct 2026, "performance based marketing agency" got about 140 US searches a month, "commission based marketing agency" about 30 and "revenue share marketing agency" about 10 (OpenSEO, US). Plenty of people look it up. Few agencies run it.
Where performance deals break: the revenue number
Ask people who've run one of these deals and the same thing comes up. On that March 2026 r/PPC thread, one commenter said both fee options "break the same way: attribution arguments and margin mismatch." Someone on r/AskMarketing who had worked with revenue share agencies from the client side said the deal "lives or dies on one thing: attribution" (r/AskMarketing thread).
Here's where it goes wrong.
Two platforms, one sale. Meta attributes a purchase to an ad if it happened "within a certain number of days after someone viewed or clicked on your ad" (Meta Business Help Center). Google applies its own attribution setting to each conversion action, and data-driven is "the default attribution model for most conversion actions" (Google Ads Help). Neither one removes a sale the other already took. Add their revenue together and you can end up above what the client was paid, and a percentage of that total is a fee on money that never arrived.
Refunds, chargebacks and promo codes. A sale that comes back next month still counted this month. The advice from the March 2026 thread: "define the revenue source upfront, and bake in refunds and promo codes."
Revenue the campaigns didn't make. Email, organic search and returning customers bring in sales whether ads run or not. The r/AskMarketing commenter warned that without a written definition, "they'll claim credit for branded search, returning customers, and sales that would've happened anyway". A commenter in an r/agency thread on profit sharing raised the same point from the agency side: "You need a super clear definition of profit, and does that include returns" (r/agency thread).
Incentive drift. A revenue fee rewards revenue, and the client lives on margin. In the words of another r/AskMarketing reply, "the agency wants revenue and you want profit." The March 2026 thread adds the other half: without a margin guardrail, "u can “win” by discounting or pushing low margin sku."
Agree these six things before the percentage
Write these into the agreement before anyone mentions a number.
- 1Where the revenue number comes from: the payments in the client's processor, for the same dates and time zone. Not the platforms' claimed totals added together.
- 2What counts: payments from visits that came through the agency's campaigns, or all revenue above a baseline. Pick one and write it down.
- 3Refunds and chargebacks: when they come off the number, and for how many days after the sale.
- 4The baseline: for example the previous three months, as one r/PPC commenter suggested, and whether it moves for seasonal sales.
- 5A floor and a cap: a base retainer that covers the work, plus a kicker with a ceiling.
- 6Who can see the data and how disputes get settled each month, ideally a read-only view both sides open.
Not sure how far apart the numbers are for a client? Run a payment gap check before a percentage goes in the contract.
A worked example
Sample only. Invented for teaching. Not an industry average, not a customer result. Every figure here is illustrative.
An agency spends €10,000 of a client's money in a month. Meta claims €28,000 of purchases and Google claims €19,000, so the claims add up to €47,000. The payments in the client's processor for the same dates, from visits that came through those campaigns, come to €36,000.
- A 5% fee on the claimed €47,000: €2,350.
- A 5% fee on the €36,000 of payments: €1,800.
- The difference: €550 for the month.
That €550 is the argument waiting to happen. The agency can point at two dashboards. The client can point at the bank. Both are reading a real number, and the contract never said which one counted.
It changes how the account looks too. On the claims, that month is a 4.7 ROAS. On payments, it's 3.6. If you report on payments, here's how true ROAS works and how it compares with blended ROAS and MER. Work out the client's break-even ROAS as well, so a kicker never pays out on sales that lost money.
Running performance deals for several clients?
Thexly for agencies gives each client a workspace and a read-only link they can open without logging in, so the number behind the fee is one both sides can check.
How to price PPC services if you're not ready for a performance fee
Most agencies aren't, and that's fine. A May 2025 r/PPC thread on agency pricing laid out the usual options and their trade-offs (r/PPC thread).
- Flat monthly retainer: predictable for both sides, but scope creeps unless someone pushes back.
- Percentage of ad spend: it scales with the work, but as a commenter there put it, "agencies tend to be incentivized to spend even with flat or bad performance to the business."
- Retainer plus a performance kicker: one agency owner said they'd "make sure we could cover our costs if we completely missed bonus."
Another commenter in the same thread put the trade-off in one line: "Rev share punishes you for scaling, and % of ad spend rewards waste."
Whatever you charge, the monthly report still needs a revenue number both sides believe. Our Google Ads report template is a good place to start.
Where Thexly fits, and where it doesn't
Thexly matches each payment in your client's processor to the campaign visit that led to it, counted once. You and the client read the same revenue number, split by which campaigns produced it. Each client gets a workspace, and you can share a read-only link they open without logging in (how a live client report works). The trial is 14 days and needs no card.
What it doesn't do: it doesn't calculate or invoice your fee. You and the client do that maths on the number. It doesn't send conversions back to Meta or Google, and it doesn't pull ad spend, so you bring spend from the client's ad accounts. It isn't built for lead-gen or CRM-closed deals either. To see the gap for one client first, try the platform vs payment gap tool.
Put one revenue number in the deal
Thexly for agencies gives each client a workspace, with payments matched to the campaigns that led to them and a read-only link the client can open without logging in. Start with one client on the 14-day free trial.
FAQ
What is a performance-based marketing agency?
It's an agency that gets paid at least partly on results, such as a share of revenue, a share above a target, or a fee per sale. Most still charge a base fee as well. Public data suggests few agencies work this way: Promethean Research's 2025 report puts any model involving performance-based pricing at 5% of responses.
How do performance-based marketing agencies charge?
Usually in one of four ways: a commission on revenue the campaigns are credited with, a share of total store revenue, a share of revenue above a baseline on top of a retainer, or a fixed fee per sale or lead. Whichever one is used, the agreement should say where the revenue number comes from before it sets a percentage.
What is a commission-based marketing agency?
It's an agency paid a percentage of the revenue its campaigns are credited with. The catch is the word "credited". Meta and Google can both count the same sale, so the agreement needs to say whose count is used, or base the fee on payments the client received.
How does a revenue share agreement with an agency work?
The agency takes an agreed cut of revenue, either of the whole store or of revenue above a baseline. A whole-store share pays the agency for sales from email, organic and returning customers too, so some deals use a baseline, such as the previous three months, and pay only on growth above it.
Is pay for performance marketing a good deal for an ecommerce brand?
It can be, if the revenue number, refunds, baseline and a cap are written down first. Without those, the brand can end up paying a percentage of sales the campaigns didn't produce, or of platform claims that add up to more than it was paid.
Which revenue number should a performance fee be based on?
The payments in the client's processor for the agreed dates, net of refunds. Not the platform-claimed totals added up. If the fee covers only campaign revenue, count the payments from visits that came through the agency's campaigns.
Why do Meta and Google report more revenue than the bank shows?
Each platform counts conversions under its own attribution setting and window, and neither removes a sale the other already counted. When a shopper clicks a Meta ad and a Google ad before buying, both can claim that one sale, so their totals added together can exceed what the client was paid.
Can Thexly calculate our agency's performance fee?
No. Thexly shows which campaigns produced the payments, matched to the campaign visits that led to them. You and the client do the fee maths on that number.
Have you tried a performance fee with a client? What did you two end up arguing about? Tell us at hello@thexly.com.