Reaching out to a digital marketing agency can be daunting. When you are going to market for proposals, it’s important to ask the right questions so that you have a clear understanding of:
- The agency’s fee structure
- Approach to strategy
- Success metrics
The market is currently unregulated, so you need to ask the right questions to ensure you are recruiting a reputable and honest agency. It’s essential that your agency is incentivised by your bottom line (not their own).
Here are 7 questions you can ask to ensure you’re saving money on fees and driving long-term results.
1. Who owns the advertising accounts and how are your fees structured?
Some agencies will pay Google or Facebook directly for your ad spend and invoice you for the fees later so that they can reserve the rights to the accounts. This means that when the time comes for you to move on, the campaigns you have spent precious time and money optimising could be inaccessible.
You should have full access to your advertising account and your credit card should be charged directly. Otherwise your agency can retain your historical data and key insights for future campaigns.
If you want to move to a new agency, there needs to be a smooth handover where the new agency can pick up where the incumbent has left off. You should also have the freedom to explore the market without having the risk of losing your data.
Also ask how the fees are determined when an agency presents their proposal. We see a striking number of clients leaving their agency with minimal understanding of how their money is spent and what work is being executed on their account.
Questions to ask include:
- ‘Do you work to an hourly rate?’
- ‘Do you track how time is spent?’
- ‘Is the management fee calculated as a percentage of click spend?’
A lack of transparency over time management is a warning sign. Taking a percentage of click spend also means that the agency is inherently incentivised to increase your advertising budget. A healthier scenario is for the agency to charge an hourly rate for the time required to manage your campaigns.
2. What are your staff and client churn rates?
Low staff and client churn rates are a sign of a healthy agency.
Ensure that your agency takes pride in long term, genuine relationships with their clients. Ask how long an average client has worked with the agency and a client reference check. A reputable agency should be able to let you choose any client from their portfolio to call.
3. What is your previous experience?
Despite seeming obvious, very few clients will raise this question in initial discussions with an agency. A good indication of how well a digital marketing agency will be able to serve you comes from their previous experience with your industry, business model, and goals.
For example, if you are planning on international expansion, ensure that your chosen agency has experience in this arena to avoid hurdles down the track.
4. Do you outsource?
Many digital marketing agencies offshore work in order to save money. While offshoring can be a cost-effective way of managing manual tasks, quality control can be difficult to manage.
An agency based in Australia may have a slightly higher cost, but the ability to maintain strict quality control and consistency across accounts can show you a stronger return on investment.
5. How are your staff resourced?
Every digital agency operates in a different way. For some, staff are hired as required and new clients assigned to whoever is available. For others, the agency shares the tasks through a central project manager.
Get a firm understanding of how staff are allocated clients and workloads so that you know how you will be managed and looked after within the agency. As questions such as:
- ‘How many other clients will my account manager have?’
- ‘How many billable hours do staff work?’
- ‘How many are left for training and development?’
These questions will give you a firm understanding of the time your account manager will have available to take care of you.
6. How do you communicate with clients?
It’s important to establish your long-term relationship upfront. Ensure that your expectations around communication and success metrics are aligned from the get-go.
Establish how frequently you will communicate in person, over the phone, or via email. Also, ask how regularly you will receive updates on your campaigns.
Find out if your direct point of contact (aka. account manager) is a middle-man, or the technical expert working directly on your account. Both systems have their pro’s and cons:
- The first option ensures you are dealing with someone who likely has fantastic communication and relationship building skills, but you can struggle to get technical answers on short notice. This structure can also lead to delays in important account changes.
- The second structure provides direct contact with the technical expert and can be highly efficient when they also have strong communication skills.
You also need to know how an agency is going to report into you. Ensure that their metrics are directly linked back to your business goals. It’s easy for an agency to report in on ‘vanity metrics’ that make them look good, rather than business returns.
7. Does the agency receive any kickbacks or commissions?
Find out why your agency is suggesting certain partners. Ensure that they are recommending a partner who is a good fit for you, rather than someone who gives them a nice commission. If referral kickbacks are involved, you may need to do additional research into the partner’s capabilities.