Provide all the services necessary to manage your total advertising and marketing program. Depending on your business's goals, present needs and capabilities, this can include:
Historical spending is one way to set an ad budget, but not the best. Percent-of-sales is another approach, but should be guided by factors like company size and product stage (maturity). Another method—the one we usually advocate—is the "task to be accomplished" approach whereby a list of goals drives a list of strategies, which in turn drives a list of tactics or tasks. Each task is then assigned a cost and the sum is a budget.
Consult your industry's trade association for guidelines, or ask us. Through the American Association of Advertising Agencies (AAAA), we can track down the historical spending levels of businesses in just about any industry.
Actual compensation methods vary depending on your needs.
At the end of the day, whether we're compensated on a project, or hourly basis, through media commissions or through a retainer, the acid test is simple: if you feel you got what you paid for, the compensation arrangement is working.