5 Red Flags that your Ad Agency is Ripping You Off

Red Flag #1
Percentage of Ad Spend

Any agency that is paid a percentage of your ad spend is a red flag. [Note: This is most agencies]

Under such a billing model, the Agency’s incentive is to spend as much as possible: The more they spend, the more they get paid.

What is the best way to get you to spend more? By making you think your campaigns are generating lots of revenue (even if they’re not)

Red Flag #2
View Through Attribution

Using View Through Attribution data is a classic way to over-inflate the performance of Display Ads, and Facebook ads.

Using view attribution in your Facebook campaigns can inflate performance results by 2x or more. That can easily cause you to spend twice as much as you normally would vs Click only attribution.

Red Flag #3
Branded Search subsidizing Non-Brand Search

For most brands, the majority of search revenue comes from Branded Search, but the search volume for branded search is limited, so there’s a cap on how much you can spend.

By combining your highly profitable but limited brand terms with your less profitable but high-volume non-brand terms, ad agencies can make you spend more while making it seem like there’s better performance.

Behind the scenes, all the profits from your brand searches are subsidizing the losses of your non-brand campaigns.

This makes you spend more, which makes the Agency happy.

See Also: Branded Search Revenue is an Illusion

Red Flag #4
Performance Max

The biggest cost for an agency is hours worked. To make more money, they need to reduce their costs, which means they have to reduce the hours worked on your account.

Introducing Performance Max!

Performance Max is the master of low effort
+ high costs Campaigns.

Firstly, by default, Performance Max blends Branded and Non-Branded search to give the illusion of performance
(see Red Flag #3).

Secondly, the Agency requires very little hands-on management time. Google’s AI and Smart Algorithms handle almost all of the work!

This setup is great for agencies that get paid based on ad spend. PMax lets them spend more with less work, which helps them make more money! (For them, not you)

See Also: Performance Max Sucks!

Red Flag #5
Takes Credit for All your ECommerce Sales

Some agencies will want to measure their success based on the total performance of your e-commerce store.

This is a big red flag.

The ad agency should only be responsible for the revenue directly linked to their actions, and should not claim credit for other factors that are contributing to the growth of your brand.

There’s a lot of ways for a business to generate sales and grow. Agencies that want to be measured on the overall business performance, are usually hoping for a free ride on your coat-tails.