Dive into the commercial side of streaming and find the right pricing model for your agency and your clients.
When an agency decides to add Connected TV (CTV) to its service mix, the first hurdle is often technical: Which DSP do we use? How do we target?
But the second hurdle is commercial, and it is arguably more critical: How do we sell it?
Unlike social media, where the pricing model is fairly standardized (media cost + agency fee), the programmatic nature of CTV offers two distinct commercial structures: Managed Service and Transparency (Pass-Through).
Neither model is inherently "better." Both serve specific business needs. However, misaligning the model with the client's goals can lead to friction, margin erosion, or mistrust.
Here is how to evaluate both models to structure a sustainable CTV offering.
1. The Managed Service Model
In this model, the agency provides an "all-in" CPM (Cost Per Mille) to the client. If the agency quotes a $30 CPM, the client pays $30 for every 1,000 impressions, regardless of what the media actually cost to buy on the backend.
How it works:
The agency acts as a reseller. You purchase the inventory, data, and tech access, bundle it with your service/optimization time, and present a single price to the client.
Best for:
Smaller Advertisers: Clients spending under $10k-$20k/month often prefer simplicity over granularity.
Performance Focus: If the client only cares about the Cost Per Acquisition (CPA) or ROAS, the component costs (media vs. data vs. fee) matter less than the final outcome.
Risk Mitigation: The client gets a guaranteed price. If market rates spike, the agency absorbs the cost; if rates drop, the agency retains the margin.
The Trade-off:
The "Black Box" perception. Because the breakdown is not visible, sophisticated clients may eventually ask how much of their dollar is working media vs. agency margin.
2. The Transparency (Pass-Through) Model
In this model, the agency unbundles the costs. The client sees exactly what the media cost, what the data fees were, and pays the agency a separate management fee (usually a % of spend or a flat retainer).
How it works:
The agency acts as a strategic operator. The client often owns the seat (or has audit rights), and the agency charges for the service of running the campaign, not the media itself.
Best for:
Enterprise Clients: Large brands with internal procurement teams almost always demand this model.
In-Housing Teams: Clients who plan to eventually take operations in-house need full visibility into the data and supply chain.
Complex Attribution: When campaigns are heavily focused on incremental reach and raw data log analysis, transparency helps align the data sources.
The Trade-off:
Complexity. Invoices can be difficult to read (listing separate line items for tech fees, data fees, and media). Additionally, the client bears the market risk—if CPMs rise in Q4, the client pays more.
Comparison: At a Glance
Feature | Managed Service | Transparency Model |
|---|---|---|
Pricing Structure | Fixed "All-in" CPM | Dynamic Media Cost + Agency Fee |
Client Visibility | Outcome-focused | Input-focused |
Market Risk | Held by Agency | Held by Client |
Invoicing | Simple (1 Line Item) | Complex (Multiple Line Items) |
Primary Value | Simplicity & Guarantee | Clarity & Control |
Which Approach is Right for Your Agency?
Many successful agencies run a hybrid model.
They offer a Managed Service Tier for new clients or those with smaller, experimental budgets. This allows for a frictionless "test and learn" phase without overwhelming the client with technical contracts and seat fees.
Once the account scales (e.g., exceeds $50k/month), they transition the client to a Transparency Tier, where the fee structure shifts to a % of spend.
The Golden Rule:
The most important factor is alignment.
If you pitch Managed Service, sell on Guaranteed Outcomes.
If you pitch Transparency, sell on Strategic Control.
By clearly defining these two tracks in your service agreement, you remove ambiguity and position your agency as a mature partner capable of handling growth.