Is gross cost still serving local TV advertising?

For decades, gross cost has been the standard financial metric used throughout traditional media. And for decades, it made perfect sense.

Gross cost was born in an era when agencies were compensated through a standard 15% commission. If a client spent $100,000, the agency retained $15,000 and the media company received $85,000. Gross represented the full transaction and provided a common benchmark across buyers, sellers and advertisers.

At the time, it was logical. But that compensation model has largely disappeared.

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