15 percent system
The 15 percent system is a compensation system in the field of advertising .
According to the 15 percent system, an advertising agency does not receive a fee from the customer as remuneration for its services - which essentially comprises the conception of an advertising campaign , the creative design of advertisements and the placement of advertisements in the media. Instead, it retains a 15 percent commission from the amounts it spends on the customer's account for the placement of ads and only forwards the remaining 85% to the media in which the ads were displayed.
The system was the standard for a long time, especially in the USA, and was also defended by industry associations in the advertising industry until it was banned for reasons of competition law in 1956. It had already been criticized within the industry because it creates incentives for the advertising agency to favor campaigns with particularly high commission rates to the detriment of the customer.
The procedure is occasionally still used today, but has lost its importance in favor of a system in which the advertising agency receives a fee directly from the customer. Where it is still used, the usual commission rates are usually less than 15%.