Sponsorship, name dropping and product placements/mentions

When on radio and you hear a brand being name dropped by a DJ or another form of product placement or sponsorship, how do the agencies/middlemen set these up between each other? Do they charge a once off fee to the advertiser or is there a contract rolled up between the advertiser and agency? If a contract is made, how does the agency know how much to charge the advertiser before the placements?

Thanks
James