There are potentially a large number of parties involved for every out-of-home advertising campaign and therefore a number of different contracts and fee arrangements between those parties. Each campaign is different and may involve, amongst others, some or all of an advertiser, advertising agency, poster specialist and outdoor advertising company or media owner. Governing the relationships between these parties will be a number of contracts and arrangements which can give rise to the possibility of uncertainty and/or confusion, especially for the ultimate paymaster – the advertiser - on commissions, discounts, rebates, fee arrangements and payments.
Customarily out-of-home advertising companies offer commission rates of 15% of the total advertising spend to recognised advertising agencies and a further 5% to recognised poster specialists. In practice, these commissions have tended to vary progressively over time as a result of negotiations between advertising and media agencies, poster specialists and out-of-home media owners.
As a matter of industry practice, such commissions are granted as a discount off the total advertising spend. Media owners typically grant these types of discounts to advertising agencies and poster specialists.
In addition to these commission rates, outdoor advertising companies will, in certain circumstances, be asked by a poster specialist to grant volume rebates that reflect principally the volume of business placed by the poster specialist over a contract period (typically a calendar year). These arrangements, which are particular to each out-of-home media owner and poster specialist relationship, can include progressive rebate rates, and may for certain specialists represent a material percentage of the overall annual value of any business placed with those media owners by those poster specialists.