The Structure of Advertising Sales Commission

To keep sales people motivated and to retain the best of your sales force, you need to create a compensation package that fits your business model and the roles of the sales people. According to "Inc.", the most common package is a combination of salary and commission, but it is not the only package available, especially in the world of advertising.

In the volatile world of print, electronic and mass media advertising, salaried sales people are not the norm but rather the exception. With a full salary, your sales people will feel secure in getting a consistent paycheck, which is great during the downturns of a market, but can also limit compensation and, from a management perspective, can reduce an employee’s motivation. According to "Inc.," if you plan on creating a salaried sales force, consider their job duties and roles. Jobs featuring duties such as account management or inside sales lend themselves to salaried positions more so than those requiring your people to pound the pavement.

A straight commission sales model is the opposite of a salaried job. According to the American Marketing Association, straight commission sales jobs, where an employee earns a percentage of sales, can be risky, especially if sales person is selling an unproven product or is new to sales. If you are considering adopting a straight commission model, consider who you are hiring. Look for established sales people who are comfortable with no base and no ceiling. Realize that high turnover is likely to occur with the type of model, especially if you are dealing with a cyclical ad sales program such as annual publication, and weigh the costs of training new groups periodically versus paying a base against commission.

According to "Inc.," the most common of sales compensation structures, across the board, is a model using both a base commission and salary. Salary and commission mixes range from 80 percent salary and 20 percent commission to 60 percent salary and 40 percent commission. Commission rates can also vary depending on the type of ad sale. According to eMedia Vitals, you should consider building in a higher rate of commission for an online ad versus a traditional print ad, as selling online advertising requires knowledge of online advertising and could be a more difficult sale. The base plus commission model also allows sales people the ability to earn more income while providing the motivation that, you, as an employer, desire for optimum productivity.

Building in a sales bonus structure is another way to spur a motivated sales team. In addition to a salary and a traditional commission structure, providing your sales people with a paid benefit for meeting sales goals or quotas can provide you with an opportunity to not only reward your best sales people but provide an enticement for the rest of your team. Performance bonuses can be based either on a straight percentage of sales earned after a certain benchmark has been achieved or a lump sum when a sales level has been met, payable upon completion of various levels that you and your sales team determine.