Hiring an Online Ad Agency: What to Know
A lot of business owners want outside help because running online ads themselves is tough. But since every online advertising agency handles things differently and operates in unique ways, just hiring one based on its name can lead to results that miss the mark.
In this post, we'll walk through what online advertising agencies actually do, how their services are categorized, what makes up their fees, and what you need to check before signing any contract. We've put this all together so you can weigh the pros and cons before spending your ad budget.
What Exactly Does an Online Ad Agency Do?
Even though they are all called "online advertising agencies," what they handle varies from one company to the next. Some only sell or broker ad space on specific platforms, while others take on everything from ad planning and execution to performance analysis. First things first, you need to figure out the scope of their services.
- They might just handle buying and running ads on specific platforms.
- They could include ad planning, keyword selection, and even creating the ad creative.
- Or, they might manage the entire operation, including performance analysis and suggesting improvements.
The Difference Between Niche and Full-Service Agencies
Agencies generally fall into two camps: those that focus on just one specific platform, and those that manage several platforms at once. For example, some excel at search ads, others focus on blogs or local listings, and still others specialize in social media ads.
| Type of Agency | What They Do | Who Should Hire Them |
|---|---|---|
| Niche Agency | Focuses on a single platform. | Businesses with a clear direction. |
| Full-Service Agency | Designs strategies across multiple platforms. | Businesses who aren't sure which platforms will work best for them. |
How to Evaluate an Agency Through a Growth Marketing Lens
Growth marketing isn't just about running an ad and walking away; it's about improving the entire customer journey—from the moment someone lands on your site to when they make a purchase or inquiry. When choosing an agency, you should look beyond just how much ad spend they can put in, and instead, see if they help you optimize the conversion process after the traffic arrives.
Ad efficiency isn't determined by a single campaign. If your landing pages or inquiry flow is weak, you'll just end up spending more money on ads without seeing results. Make sure to schedule time with the agency to review and fix these crucial areas.
What to Look For in a Performance Marketing Agency
Performance advertising is a method where you manage ads based on measurable outcomes, like clicks, inquiries, or sales. If an agency uses this approach, you need to ask them upfront how they define their target metrics and how often they report on their progress.
- Whether you have mutually agreed upon the target metrics.
- If they share records of ad creative and budget changes.
- If they explain the plan for improvement when performance dips.
Understanding the Costs of Ad Agencies
The fees for an online ad agency are usually broken down into several parts. You'll typically see the actual advertising spend, a service fee for planning and management, and sometimes separate charges for creative assets like images or videos. When getting quotes, don't just look at the total; break it down by each item.
There are various fee structures. Some charge a percentage of the ad spend, others use a flat monthly fee, and some adjust fees based on performance. Since your actual costs will change depending on the ad size and the scope of work, it’s important to compare them against your budget plan.
Key Things to Confirm Before Signing a Contract
Checking a few specific points before you sign the contract can help prevent disputes down the road. Pay close attention to how you'll communicate with your contact, how often they'll report, and who owns the ad accounts.
- Who your main contact will be and what their communication and reporting schedule looks like.
- Whether the ad accounts and all related data belong to you, the advertiser.
- How they will handle the transition of responsibilities when the contract ends.
- How they handle tax invoices and provide proof of ad spending.
Frequently Asked Questions
Can I just pick an online advertising agency based on rankings?
Rankings are just a reference point. Even if a company is highly ranked, it might not be the right fit for your specific industry, budget, or goals. Make sure to check if they have case studies from similar businesses and if the person you're talking to asks about your business objectives first.
Would studying a growth marketing book beforehand help?
It can definitely help you grasp the basic concepts. However, instead of just applying methods straight from a book, it's better to develop a habit of personally checking where your customers are coming from and where they are dropping off.
If I hire an agency, do I not need to know anything about the ads?
You don't need to know everything, but it's wise to understand the basic metrics for reading ad performance. This will help you understand the agency's reports and ask the right questions when needed.
If this is your first time, try asking the same questions to two or three different agencies and compare their answers. The most reliable next step is to get everything—roles, cost breakdowns, and termination clauses—in writing.