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Methodology

Agency Campaign Margin Planner methodology

Price agency campaign delivery with pass-through media handling, scope reserve and an explicit target margin.
Duc Nguyen X.By Duc Nguyen X.· Founder, Margin101Last reviewed: View update historyMethodology

Educational only: Business decision support, not accounting, tax or legal advice.

Privacy: Calculations run locally; Margin101 does not receive your commercial inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral small-business planning using your own assumptions.

1. Formulas and units

Handling Revenue
handlingRevenue = media spend handled × handling fee rate

Where

mediaSpendHandled
Client media spend handled (currency units on one consistent basis)Source: Business record
mediaHandlingFeeRate
Media handling fee rate (decimal rate)Source: Business record
handlingRevenue
Handling Revenue (money)Source: Calculated output
Base Delivery Cost
baseDeliveryCost = campaign hours × loaded hourly cost + external delivery costs

Where

campaignHours
Campaign hours (whole or operational units)Source: Business record
loadedHourlyCost
Loaded hourly cost (currency units on one consistent basis)Source: Business record
externalDeliveryCosts
External delivery costs (currency units on one consistent basis)Source: Business record
baseDeliveryCost
Base Delivery Cost (money)Source: Calculated output
Scope Reserve
scopeReserve = base delivery cost × scope buffer rate

Where

scopeBufferRate
Scope reserve rate (decimal rate)Source: Business record
baseDeliveryCost
Base Delivery Cost (money)Source: Calculated output
scopeReserve
Scope Reserve (money)Source: Calculated output
Protected Delivery Cost
protectedDeliveryCost = base delivery cost + scope reserve

Where

baseDeliveryCost
Base Delivery Cost (money)Source: Calculated output
scopeReserve
Scope Reserve (money)Source: Calculated output
protectedDeliveryCost
Protected Delivery Cost (money)Source: Calculated output
Agency Revenue
agencyRevenue = client service fee + handling revenue

Where

clientServiceFee
Client service fee (currency units on one consistent basis)Source: Business record
handlingRevenue
Handling Revenue (money)Source: Calculated output
agencyRevenue
Agency Revenue (money)Source: Calculated output
Gross Profit
grossProfit = agency revenue − protected delivery cost

Where

protectedDeliveryCost
Protected Delivery Cost (money)Source: Calculated output
agencyRevenue
Agency Revenue (money)Source: Calculated output
grossProfit
Gross Profit (money)Source: Calculated output
Gross Margin
grossMargin = gross profit ÷ agency revenue

Where

agencyRevenue
Agency Revenue (money)Source: Calculated output
grossProfit
Gross Profit (money)Source: Calculated output
grossMargin
Gross Margin (percent)Source: Calculated output
Minimum Agency Revenue
minimumAgencyRevenue = protected delivery cost ÷ (1 − target margin)

Where

protectedDeliveryCost
Protected Delivery Cost (money)Source: Calculated output
agencyRevenue
Agency Revenue (money)Source: Calculated output
minimumAgencyRevenue
Minimum Agency Revenue (money)Source: Calculated output
Minimum Client Service Fee
minimumClientServiceFee = max(0, minimum agency revenue − handling revenue)

Where

clientServiceFee
Client service fee (currency units on one consistent basis)Source: Business record
handlingRevenue
Handling Revenue (money)Source: Calculated output
agencyRevenue
Agency Revenue (money)Source: Calculated output
minimumAgencyRevenue
Minimum Agency Revenue (money)Source: Calculated output
minimumClientServiceFee
Minimum Client Service Fee (money)Source: Calculated output
Margin Gap
marginGap = gross margin − target margin rate

Where

targetMarginRate
Target margin rate (decimal rate)Source: Business record
grossMargin
Gross Margin (percent)Source: Calculated output
marginGap
Margin Gap (percent)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.

2. Worked example

Input assumptions

Worked values below come from the same registered engine and visible default assumptions.

Calculation and outputs

Example

Worked values below come from the same registered engine and visible default assumptions.

Handling Revenue
500.00 currency units
Base Delivery Cost
7,000.00 currency units
Scope Reserve
700.00 currency units
Protected Delivery Cost
7,700.00 currency units
Agency Revenue
12,500.00 currency units
Gross Profit
4,800.00 currency units
Gross Margin
38.4%
Minimum Agency Revenue
11,000.00 currency units
Minimum Client Service Fee
10,500.00 currency units
Margin Gap
8.4%

The exact engine-derived outputs are shown in the labelled rows below.

Interpretation

Minimum client service fee protects the entered delivery cost, scope reserve and target margin after media-handling revenue.

3. Validation and boundary checks

  • All inputs must be finite and non-negative unless the formula explicitly permits a negative calculated profit or gap.
  • Rates must remain between 0% and 100%; horizons and declared counts use the exact whole-number boundaries shown by the inputs.
  • Zero denominators return an explicit unreachable state rather than Infinity, NaN or a numeric sentinel.
  • Compared records must use one consistent attribution, contribution, period and currency basis.

4. Assumptions and source classification

  • Retention, conversion, attribution and incrementality are user assumptions rather than causal claims.
  • Customer value is contribution-based and bounded to the selected finite horizon.
  • No provider rate, market benchmark, country rule or policy constant is embedded.

This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.

5. Limitations

  • The workflow does not forecast demand, retention, conversion or campaign performance.
  • It does not replace financial, accounting, tax or legal advice.

This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.

Change history

  1. : Initial public release of the Agency Campaign Margin Planner planner and methodology.

Related reading

Guides to interpret the decision and its assumptions.

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