DSP Fee Structures: Commission Double Charging?
Hi everyone, A former colleague is currently negotiating a DSP Master Service Agreement (MSA) for a self-serve platform. They've found that the proposed agreement allows the DSP to charge a fee for additional services and features (covering operational costs plus a margin), and then include this fee in the 'Total Spend', which is subject to another commission or Platform/Tech Fee percentage—essentially double charging for the same service. We've discussed this and found it aligns with our experiences. Generally, DSP MSAs, after procurement negotiations, follow one of two models: 1) They pass on costs for external third-party services and charge separately for proprietary or first-party extras, already including a margin, but do not add these fees to the 'Total Spend' subject to the Tech Fee percentage. 2) They offer proprietary extras as added value to encourage higher spending on their platform and cover their operational costs solely through the Tech Fee percentage. Google DV360 is an example where optional features and services from Google don't incur extra fees, with their DSP margin coming entirely from the Tech Fee percentage. We have not encountered other DSPs engaging in this type of double margin practice. If anyone has experience with this situation, please share insights I can pass along. Thanks in advance! P.S. A quick note for May 9: I know that The Trade Desk does apply this type of fee structure, but they are known for their intensive fee structures, so I didn’t consider them as part of the norm. This discussion excludes The Trade Desk as well as Google/DV360 since I know they don’t engage in this double charging practice. This inquiry pertains to other DSPs.
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