Total billings

Advertising agencies charge their clients an amount that includes charges for advertising space. This amount clients are charged are an ad agency's "billings". An ad agency's billings form part of its turnover but are not generally recognised as part of its revenues.

When ad agencies retain part of the charges for buying media space as a commission (from the seller of the space) this is recognised as part of its revenues. Traditionally, ad agencies retained a commission of around 15%. This has been changing and negotiated fees paid are becoming commoner.

Total billings are an indicator of how much business an agency is handling. Numbers for total billings are often announced in trading statements before turnover numbers for the same period are disclosed. They are often the earliest performance measure available to investors.

Total billings numbers are disclosed by media buying companies as well as ad agencies.

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