Five models occur in Belgian practice. Each one drives behaviour, and that matters more than what each one costs: over time you get the behaviour you reward.
The five
1. Hourly rate. You pay hours worked at a rate per profile. Fair for unpredictable work, awkward for the rest: the agency earns more the longer something takes, so you end up checking timesheets.
2. Project price. One amount for a bounded scope. The agency carries the risk of surprises, you get certainty. Only works when the scope is genuinely fixed, otherwise every change becomes a negotiation.
3. Fixed monthly fee, or retainer. An amount per month for agreed capacity or an agreed package. Comfortable for both sides, and the most common form in a longer relationship. The risk is scope creep: something is added every month while the fee stays the same, until someone reopens the conversation.
4. Commission on media spend. A percentage of what you spend on media. Historically the media agency model. It rewards volume rather than effect, which is an uncomfortable incentive when your agency also advises how much to spend.
5. Performance-related pay. Part of the remuneration hangs on agreed outcomes. Sounds fairest and is hardest: everything depends on a measure both parties accept in advance and that is not influenced by thirty other things. See value-based pricing.
What you see in practice
Most contracts combine two: a fixed fee for the running work plus project prices for anything on top. That is a good standard, provided you write down exactly what the fee contains. Without that list, every discussion about additional work becomes a discussion about memory.
The question to ask before choosing
"What behaviour does this model reward?" Pay by the hour and you reward hours. Pay by project and you reward speed. Pay on media spend and you reward spending. Choose the model whose incentive sits closest to your goal, not the one that looks cheapest on paper.
IKAg builds remuneration models on both sides of the table, for advertisers and for agencies. That is the work behind Agency evaluation & remuneration.
See also: fee, commission or hourly rate and pay by the hour or by the project.