How do I manage a fee model?

Owned by Darius Rybacki (Deactivated)
Last updated: Feb 23, 2024 by Tatiana Ploeger

What is a fee model?

A fee model is a model via which you can automatically charge advertisers for the traffic and/or the conversions the partners in your platform are generating. How the advertiser will be billed (via invoice or deposit), depends on the billing mode you have selected for your advertiser. Please note that creating a fee model is only necessary when you have selected ‘postpayment direct’, ‘postpayment standard’, ‘prepayment’ or ‘self billing’ as a billing option. If you have selected ‘no billing’, you will find that it is not possible to create a fee model.

Before you start

Like the commission model, the fee model will relate to conversion targets and tracking categories. Make sure they are created before you start creating a fee model for your advertiser.

Creating a new fee model

Getting started

As usual, make sure you are logged in to your admin UI, click on ‘advertiser’ in the navigation menu and proceed to click on ‘manage advertisers’. Proceed to find the advertiser you want to create a fee model for and click on the corresponding  icon. If you do so, you will see a page containing all existing fee models.

To start creating a new model, click on the button ‘create new fee model’ in the right top corner of the page. If you do so, a page will be loaded looking more or less like this:

As you can see, the page contains two sections: one in which you can enter the main settings of your fee model and another one in which you define the actual values of the fee model.

Defining the main settings

Start by giving your fee model a name and add a brief description. The status of your fee model will automatically be set to active. Only set the status to deactivated when you are preparing a model you do not want to use immediately.

When you mark the default tick box, the fee model will be used as the default model. This means it will be preselected when you admit a partner to the program of the advertiser.

Defining the fee model values

Creating a period

Start by giving the fee model values a name. This can be the same name as the name you have used for the main settings, but it can also be related to a specific period in which you are charging your advertiser differently. Make sure you also define the validity period of the fee model by selecting dates in the fields next to it. Please note, you can always set the validity to unlimited for the time being – this does not mean values cannot be changed later.

Choosing a base

Basically, there are three bases on which you can define the values for your fee model:

  • CPM, which means you will charge your advertiser for every 1000 views the partners in your network generate.

  • CPC, which means you will charge your advertiser for every click your partners generate.

  • CPA, which means you will charge your advertiser for every conversion your partners generate. In most cases, these conversions will be attributed based on clicks (PC), but you can decide to charge your advertiser for post view conversions as well by clicking on the button ‘+ postview’.

Please note that you can also create a combination of these three bases. When you are defining CPA based values, you will have to differentiate fee values by conversion target and tracking category.

Choosing a method

For all these bases, you will have to define a so called method. This method defines to what values the fee will be applied and how your advertiser will be charged. There are four different methods you can choose from. Let’s go through them one by one.

Based on commission

As the name already suggests, this method relates the fee to the commission. Let’s develop an example. Your conversion has a total order value of €200 and a commission of €10. If you use a percentage based fee of 10%, the fee applied to this conversion will be €1. The total cost for the advertiser, i.e. commission and fee, will be €11. The fixed fee you apply will always be the same, regardless of the commission value. If you apply a €5 fixed fee to this conversion, you will have a total cost of €15. If the commission would have been €20, the fixed fee would have also been €5 and the total cost for the advertiser €25.

Based on order value

If you choose the ‘based on order value’ method, the fee will be applied to the order value. Let’s use the same example we used for the previous method: a conversion with an order value of €200 and a commission of €10. If you use a percentage based fee of 10%, the fee applied to this conversion will be €20. The total cost, i.e. commission and fee, will be €30. The fixed fee you apply will always be the same, regardless of the order value. If you apply a €5 fixed fee to this conversion, you will have a total cost of €15.

Based on order value (inclusive)

If you choose this option, the fee will be applied on the order value as well but includes the commission. Let’s use the same example we used for the previous methods again: a conversion with an order value of €200 and a commission of €10. If you used a fixed fee of €15, the total cost for the advertiser will be €15. In other words, the commission of €10 is subtracted from this amount. If you use a percentage based fee of 10%, this will result in a €20 fee, which includes the €10 commission. Again, the total cost for the advertiser equal the fee.

Please note that if you use this method, you always need to make sure the fee is higher than the commission model. If you apply a fixed fee of €5 to a conversion with an order value of €200 and a commission of €10, the total cost for the advertiser will be €5. In this case you, as the platform owner, will have to pay €5 on top to make sure the partner receives the €10 commission.

Based on commission (minimum fee)

This method basically has the same logic as the ‘based on commission model’ method. However, it allows you to install a minimum fixed fee. We will use the same example again, a conversion with an order value of €200 and a commission of €10. If you use a percentage based fee of 10%, the fee applied to this conversion will be €1 and the total cost, i.e. commission and fee, would be €11. But if you have defined €5 as a fixed fee, the percentage based fee of €1 will be overruled and instead, a €5 fee will be applied. The same will happen for any other fees below €5. The total cost for the example used will therefore always be at least €15.

Based on advertiser outlay

This model allows you to secure a specific profit margin. It only works if you use a percentage based fee. To explain the method, let’s use the same example one more time: we have a conversion with an order value of €200 and a commission of €10. Now, suppose you use a fee of 20%. If the fee is applied to the commission, this would normally result in a €2 fee and a total cost of €12. However, with this method, the fee is the result of the following calculation. The fee percentage is divided by 100% minus the fee percentage, after which the result is multiplied by the commission. For our example, this would result in a fee of €2,50 and a total cost for the advertiser of €12,50.

Editing a fee model

Make sure you are on the page with the overview of the fee models of the relevant advertiser: you can reach it by clicking on the  icon on the page where you manage your advertisers. To start editing, click on the  icon next to model you want to change. If you do so, a page will be displayed looking more or less like this:

As you can see, you can immediately start to edit the main settings of the fee model: the name, the description, the status and if the model should be used as default model. Please make sure you hit ‘save’ at the bottom of the panel when you are done editing the main settings.

To edit the actual values of the fee model, scroll down the page and click on the  icon in the panel marked ‘history’. If you do so, you will see the panel being you used to enter the original values. For further instructions, please read the paragraph ‘defining the fee model values’ above. When you are done editing, don’t forget to hit ‘save’ at the bottom of the panel you edited.

After you have saved your new fee model values, you will see a new row appeared in the history of the fee model. Via the  icon, you can display the previous values, so you will always be able to find out what fees you charged your advertiser at what time.

Deactivating and deleting a fee model

You can both deactivate and delete a fee model by changing its status. Make sure you are on the page with the overview of the fee models of the relevant advertiser and click on the  icon next to model you want to change. Again, the main settings will be displayed, along with the status of the fee model. Just put it on ‘deactivated’ of ‘deleted’ and hit ‘save’ at the bottom of the panel.