Do most agencies charge a flat monthly fee or a percentage of spend on building and managing ads?

We hear this question a lot. It depends on the agency and the scope of the service that is being provided. A lot of time a flat monthly fee aligns interest with the agency and the client. When you charge a percentage of ad spend there could be incentive to simply increase budget without being focused on optimizing for conversions and sales. We feel that a flat monthly fee that scales with ad spend is the best model for both parties.