MFA Media Agency Overhead Definition
Media agency overheads is an element within fee calculations when media agencies are establishing and/or negotiating their remuneration with clients, however, a lot of speculation and confusion exists around what constitutes media agency overheads and how they are calculated.
Each year in February, the MFA invites member agencies to complete the MFA Agency Cost Benchmark survey that captures financial data such as agency billings, revenue and expenses. The resulting reports are confidential and are available only to participating member agencies whereby each media agency may benchmark their financial results against the combined industry data.
MFA member agency CFO’s saw the opportunity to use the framework and data from the MFA Agency Cost Benchmark Report to calculate a media agency overhead around consistent and clear guidelines of what costs are included and what costs are excluded within the overhead calculation.
The resulting calculation establishes an industry standard more attuned to today’s marketplace and covering the full range of services that media agencies provide.
