8 Steps to choosing the Right Digital Marketing Agency

Plan to review agency proposals & assignments in-person or via video/ teleconference, allowing the agency to present the proposal and not just email it to you to read. Criteria for evaluating proposals should be identified in advance and consistently applied to each agency. This typically includes agency expertise, topline concepts, ability to execute, how the program will be measured, budget analysis, expectations, suggestions and recommendations for your project.

While this usually comes once you actually speak to the potential vendor, there are a few signs you can look out for that you want to stay away from. If they are making unrealistic claims that seem too good to be true, it most likely is. The right digital marketing agency not only understands and acknowledges that, but also makes it clear that achieving realistic goals takes time.

Step VII: Go Meet the Team

“Being thorough and asking the right questions (in person) will help you make the most informed decision possible when hiring an agency.” 

I. Understand the Team

If your research is thorough, you should now be left with a handful of agencies. The next thing you do is go meet with an agency at their office.

These meetings allow you to really see how an agency works from both a creative and a business sense. It is important to make sure you ask any questions or express any concerns to get all the answers and assurance you need before making a final decision.

So, do visit the shortlisted agencies personally and meet the team. Don’t just restrict yourself to meeting the sales people or upper management, go around the place to get a sense of how the agency works. And if possible, strike informal conversations with the team members.

What is the agency’s vibe?

Are the people good communicators?

Are they friendly?

Do they seem like they enjoy speaking with you and helping you, or do they seem annoyed and frustrated?

Note: When consulting with a marketing agency, there is no such thing as a dumb question. After all, it’s your brand’s success that is at stake here.

Paying attention to these often overlooked intangibles will help give you a much clearer picture of what working with the agency will be like.

A. It’s like the extension of your team!

They way you should think about hiring an agency is that you’re picking a strategic partner that will be an extension of their team for the next several years!

So, while assessing the abilities of the agency you’re meeting with, also take the time to assess the people in the room. In any meetings with a prospective advertising agency, stress the importance of meeting with the actual team who will work on your campaign to determine if you have the chemistry to make this partnership work though good times and bad. Regardless of how reputable an agency might be, the success of a campaign can very much be dependent on who manages your account.

Before officially hiring, make sure you are introduced personally to the team your company is going to be assigned. Nothing gives off a more true impression than talking to the people, getting to know their backgrounds and expertise, and showing interest in their previous work portfolio.

Because, there will come times when creative work is not on the mark and you have to give feedback, and there will be times when budgets come under pressure and you have to work through that. That is exactly when you need that chemistry. They might have the best creative in the world but if these aren’t our kind of people, we would seriously reconsider the option.

Use the following questions to help you understand who will be responsible for setting and driving strategy:

• Who will be managing my account?

• What are their qualifications/experience?

• How long have they been with the company?

• Can you send me a link to their LinkedIn profile?

• Can I see their performance metrics?

Asking all of the above questions should help you paint a fairly accurate picture of who will ultimately be responsible for the success of your campaign.

As a rule of thumb, your marketing team should be experts in the following, be it individually or collectively:

• Web development
• Graphic design
• Writing and editing
• Marketing automation
• Project management

The last thing you want is the agency using an intern or freelance virtual assistant to answer your questions. If you’re going to be paying you deserve to have somebody manage your account who has extensive experience with marketing.

B. What experience do they have?

Ask the team what outside experience they’ve had. Diversity of thought is very important in marketing, and those innovative ideas are often sparked by previous experience. Outside experience is also important in helping to develop empathy, as your account team must have a solid understanding of the challenges you face every day in order to provide valuable solutions. Teams & agencies that have experience working on both sides of the client-agency relationship will often have a great advantage in providing real life solutions.

How much combined experience do they have?

Experience comes in many forms but a digital marketing team that covers a wide array of skills over a decent amount of time (at least a few years) will help you as there should be at least one person in the agency who can answer your questions at any given time. It also means the team probably share their experience with each other creating a powerful combination to achieve results.

C. How passionate is the team?

Ask your potential agency partners what gets them excited about your business and about working with you. Ask them what industry innovations they find fascinating. Since people love talking about things they find exciting, this will help develop a personal connection and comfort level. It will also give you great insights into what would motivate them as your account team to help you succeed. If their answers focus on things that benefit them – ego, awards, making more money, etc. – you will know that they are driven by personal gain and your success is an afterthought. But if they are driven by passion – curiosity, genuine interest in your business, desire to be on the cutting-edge of innovation, etc. – they are more likely to help you succeed. What do I not mean by this? Don’t ask them if they are passionate about keyword bidding or title tag optimization. Because anyone who says they are is either a liar or crazy.

D. How ethical is the team?

An agency that employs grey hat techniques such as “buying” backlinks and using blog networks to post your content may gain quicker results but does this fit with your long term business goals? The last thing you want is Google penalizing you for it.

• Is the team thinking short term?

• Are they looking for quick results and shortcuts?

If in the name of growth hacking, the team is taking up unethical methods, reject the agency!  Understand their work process to ensure that their methods are ethical.

E. Lastly…….are they local?

A local internet marketing company will be easier to contact and also may have strong relationships with other local websites and businesses helping you with your local SEO promotion.

The sort of people you would hire yourself…..

Ok, so the point I am trying to make is don’t just meet the boss, the head of “this” and “that,” and sign the deal. Look under the hood!  Question whether they have a solid layer of account and project management – smart and experienced people who will be there to communicate effectively with you day in, day out. The sort of people you would hire yourself.

As the market diversifies and more agencies jump in, you must  question whether the people within their agency are the right fit for you and your business. Do they understand your values, motivations, and business goals, and do they have the skill sets to help you live up to them?

Early on, make sure you meet those who could be on your team. Have an idea of what questions you want to ask so that you feel comfortable they are up to the task and will meet the values of your brand.

II. Understand their capabilities

Once your basic questions are addressed, it’s time for more creative conversations. Often, first meetings between advertisers and clients are called ‘capabilities meetings’  because advertising agencies demonstrate what they are creatively capable of. While it’s important to keep an open mind about everything presented to you, take all your options with a grain of salt.

All advertising agencies can do pretty much any kind of work for any kind of client. But the truth is they shine only on certain things more than others. It’s really important to make sure they’re really clear about what they’re strongest at and why they think those particular skills are going to be right for you.

A. How well can they leverage their capabilities?

There will be different types of agencies ranging from multi-skilled teams adept in everything from SEO, content marketing and PPC management to more specialised agencies that focus on one or two skill-sets such as social media management or digital consulting.

Usually betting on a multi skilled approach may be safest as improving your marketing requires a variety of strategies. But I would say that this is exactly the question you should be posting to the agency. And let them come up with a marketing strategy. See how they plan to leverage their specializations to meet your marketing goals.

This exercise should give you a clear picture of their core strengths and capabilities.

B. Find out more about their certifications

Certified marketing agencies and professionals are required to pass a series of tests on digital marketing channels before becoming officially certified. When hiring a certified agency, you’re hiring professionals who understand the ins and outs of a particular marketing channel and know how to quickly give you results & improve your ROI. Plus, certified agencies are always up to date on the latest technologies and marketing trends that can help your business rise above competitors.

Certified agencies & professionals are also expert at identifying and tackling your most complicated marketing roadblocks based on reporting and trends, and can recommend strategies that generate leads and conversions. It is always advisable to partner with an certified agency. Make sure that the agency has these certifications:

• AMA Certified Professional Marketer
• Google AdWords Certification
• Google Analytics Certification
• Bing Ads Certification
• Facebook Ads ‘Blueprint’ Certification
• HubSpot Certifications

C. Are they ready with the latest technologies?

Digital marketing relies a great deal on the use of the latest technologies and staying updated with new tools and techniques. Ensure that the marketing agency you are looking to work with has a high level of technical expertise. Their equipment and software should be up-to-date and they should be aware of means of accessing the advanced features of the various digital marketing channels.

D. Is their marketing stack up to date?

Back in 2011 a ‘Marketing Stack’ was mainly something for the top agencies and CMO’s of  international corporations to debate and choose between. Jump forward to today and every agency has a marketing stack of its own.  (even if they don’t realise it yet) With a customer database, an email marketing solution and a website powered by a CMS you already have a three tiered stack!

A good ‘marketing stack’ comprises of tools and resources that analyze everything from back end data (customer information) to front end behavior (ads viewed, emails opened, blogs frequented, purchases made). The stack provides a single view of your prospects, and an automated process to convert them.

So, if your agency is not invested in a Marketing Stack, that indicates that they are not yet in a position to use all the data that your customers are giving to you. All the information you need to nurture and convert them from leads to customers and from customers to advocates. Going forward, this could severely restrict your firm’s growth.  Check out the various marketing stacks and ask the agency about it:

• Customer Relationship Management (CRM)—this is where you organize your customer information, and into which you import externally generated information that you purchase or generate through marketing activities.
• Tag Management Platform—With over a thousand marketing technologies out there, you need a TMS to help you deploy all of those tags on all of your sites pages, easily and efficiently.
• Content Management System (CMS)—a way to create and organize your online content around your products and services and the keywords your customers use to find stuff you make.
• Inbound Marketing—a program to capture the traffic coming to your site using landing pages with registration forms for white papers, webinars, case studies and other assets to generate leads.
• Outbound Marketing—direct email solutions, ad delivery platforms, social networking monitoring and response solutions and other tools to generate leads.
• Marketing Automation—a toolset that automates all these activities and campaigns, sorts leads based on selected criteria, and nurtures leads through the sales funnel and updates your CRM.
• Customer Management—once a customer, you show them a different kind of love that lets them know you’re looking out for them with what they’re likely to want and need next.
• Analytics – A dashboard that lets you view and virtually live the awesome results your stack is delivering.

E. How good are they with analytics?

Many marketing agencies lack in working out a very fundamental facet of marketing: analytics. You don’t want to set yourself up with people who are not fully equipped with the capabilities of measuring and reporting the performance of your business back to you. Before hiring the services of an marketing agency, make sure they give you the details of their analytics plan. Reputable agencies will gladly lay out their plans. When they do, look out for the following key metrics:

• Website traffic
• Subscribers
• Leads produced
• Sales
• Attribution

It’s important to work with people who value numbers as much as you do.

F. How well do they understand the digital media landscape?

An agency that keeps up to speed with new innovations and technology are more likely to ensure that any new opportunities that may benefit your business are proposed to you for consideration. If you work with an agency which isn’t quite up to date with things, new opportunities that could benefit your business might get missed, and you may miss certain objectives set out in your marketing plan.

The easiest way you can check if they keep up to date with new innovation and technology is through their blog and social media channels. Check how often they are updated, and if the content published is about the industry and how it is evolving.

A blog with helpful information reveals just how much of a thought leader the agency are in the industry. If you find the articles informative then you may be onto a winner. An agency that shares their passion with their community are also more likely to share their passion with you.

G. How do they keep up with trends?

Find out which blogs they read and if they have any certifications. Do they seem like they know what they’re talking about? Can they reference popular journals and articles in the industry?

H. Do they have a collaboration framework in place?

Finally, Get a better understanding of the marketing technology the agency has at its disposal and how you will interface with it. Marketing technology is a must-have – it can help you identify new audience segments, measure engagement, and attribute action and revenue to your marketing programs.

If you are planning to use a technology in conjunction with the agency, look carefully at the user interface. If you and your team are using the program daily, you want to ensure it is simple to use and the results are easy to understand. If you have your own marketing technology platforms that will play a role in measuring or assisting with the work your agency does, ask about its experience with the platform and/or how the agency’s campaign will plug into or complement it.

III. Understand their process

A. Find out the agency’s process in helping you meet your marketing goals?

Instead of asking about how they are going to help you accomplish your goals, be more exploratory in your question by asking about the process.

Sure, it’s easier for an agency to answer back that they are going to help you come up with a sound marketing strategy if you ask how. On the other hand, asking about the process itself will yield more insights on the details of the strategy.

If an agency cannot articulate their process in detail including the tools required and the frequency of interaction with your team, consider that a red flag.

Any successful agency will have a strong process in place to ensure repeatable success. It takes prolonged experimentation and expertise to arrive at a successful process. Check out the essential elements of a good agency process:

1. Understanding / Gathering client requirement

A marketing agency should have a clear process in place for gathering the expectations, requirements and goals of a client. In order to gather this information the agency has to make sure that all necessary team members can meet with the client prior to commencing work. And to drive the discussion in the right direction, the agency needs to put in place a templated question sheet. Once this process is complete, the team should submit a summarized campaign notes and receive a sign off from the client indicating approval.

2. Clear delegation of roles

Your work is more likely to get done on time when agency people know their roles. Clear expectations and responsibilities help with individual output and set up the entire team to collaborate and communicate with the right person. Managers and project coordinators need to assign tasks, set deadlines, and have a system for tracking progress.

3. Organized work environment

Having a process in place that keeps the physical and digital workspaces organized is one that is often overlooked by agencies and clients. Working in a clutter-free environment will make it easier to focus on the tasks at hand and will keep you from making simple mistakes (such as misplacing a document) that can significantly throw off a deadline. Keep your desk organized, and schedule regular dates for agency-wide cleaning and organization.

4. Review and Approval Process

In any marketing campaign, there are bound to be multiple documents that need to be reviewed and approved by various members of the team. If there is no set process in place dictating how to review documents, provide feedback and implement changes and who maintains authority over each stage of production, this could become a major area of gridlock. Make sure that the agency has a review and approval process that works. See if they are willing to adjust the steps as necessary to meet your needs.

5. A Project Management Tool in place

To take a marketing campaign from creative inception to client delivery to launch requires a team of people performing numerous jobs. It can be easy to lose track of what tasks have been completed, what still needs to be done, and who is working on each aspect of the campaign. Automated development through a project management tool helps you create a workflow chart that tracks all areas of the marketing campaign while also allowing anyone to view the various stages of project development. As an added benefit, a project management tool can help to clarify roles and responsibilities and allow managers to move around projects based on an individual’s capacity.

6. Data Dashboards

So how do you know if any of these processes actually work? How can you determine if they’re helping improve productivity? The best way to measure your team’s success is by having a reliable data management process in place. By collecting data from past and present campaigns (through Google Analytics, heat maps, client surveys, and other tools), agency team can analyze this information to look for areas of inefficiency and ways to improve client and business process.

7. Task Prioritization

Prioritizing may seem obvious, but when all of your to-dos are coming from competing clients and accounts, it’s necessary to have a process in place that allows you to differentiate between important and urgent tasks. The agency needs to store all their tasks in a central place, prioritize a day’s work, and track time. This will help the agency stay organized and feel less overwhelmed when the requests pour in.

8. Client Management

When you deliver creative material to clients for review, teams often  see their production come to a temporary standstill. Believe it or not, despite the fact that these materials are often costing the client a pretty penny, it isn’t their first priority. To aid production on the their end, The agency needs to have a process in place that will streamline client interaction. Ensure that your client knows exactly what is needed from them to move forward and on what timetable. Make sure that you are properly guided through this process.

9. Execution

Every successful agency will have a process in place that sees things through to completion. This is to make sure that everyone knows their responsibilities when it comes time to launch of the completed campaign. Internal teams and client-facing teams should be in communication with each other and work together. This part is important, as it’s easy for two different departments to forget that they’re working towards the same goals.

Whether it’s onboarding a new client, delivering the first draft of a project for client revisions, or launching a campaign, a clear process should guide each step of the client relationship. This approach will turn an agency into a productivity powerhouse and ensure that the projects are completed on time. Make sure that the agency has a clear process in place.

IV. Understand how they run their own business

Ask the agency about their own marketing strategy, website traffic and how they generate leads. If they are running a successful marketing firm, they would have no problem showing you their insights. And if you see that they are failing in their own business, you can be sure that they will do nothing extraordinary.

A. What Digital Marketing Strategies did they implement for their own brand?

Once you understand their work process the next thing you do is take a step back from your business marketing goals and ask a prospective agency about theirs.

• How did they decide to take on a specific strategy?
• Do they keep up with the trends?
• What have been the results of their own marketing efforts?
• What key lessons have they learned from using their tactics to their business?

A digital marketing agency who practices what they preach is a good sign that they’re a keeper. They should be able to demonstrate that they are their marketing practices’ best case study.

B. What’s the agency’s culture like?

A distinctive culture is probably the most powerful way in which an agency can establish “Chemistry” and display a real point of difference.

You should seek potential partners, that not just stand out from the pack but also offer a good fit between your teams. The “chemistry” factor cannot be neglected. When I say that an agency is nothing short of an extension of your team, then it is obvious that you look out for agencies which have a similar culture as yours.

How well an agency can articulate its organizational culture is definitely a source of competitive advantage. How well the agency is positioned vis-à-vis its competitive set — with a clear communication of its value proposition — is essentia. An agency’s true points of differentiation are often grounded in its vision, service standards, creativity and other behaviors that are reinforced either formally or informally within the shop itself.

C. What size clients do they deal with?

If you’re a small to medium sized business that chooses an agency that deals with larger clients and larger budgets there is a high probability they will put less time and energy into your project. Bear this in mind.

V. Understand their success

When it comes to understanding the success of an ad agency, your key indicators should be Longevity and Retention of clients.

• Do they have a roster of clients that have gone the distance?
• Over and above a great pitch, can they actually execute over time – managing the ups and downs of a program, remaining agile to address any challenges?
• What I’m saying is, can they deliver?
• How many clients do they currently work with?

You will only gain this knowledge by checking with the agency’s clients, looking at those that have renewed contracts or signed on for additional campaigns. Play the devil’s advocate – find clients who are not listed or provided as references.

A. Ask for references

Before you take the evaluation any further, ask to speak to or email some references. And don’t accept canned testimonials as a reference. Those can be falsified and there isn’t a way to ensure that they’re accurate. Instead, get a few names, phone numbers, and emails and reach out and have a brief conversation with their past and present clients.

And when you do speak with a reference, don’t just ask if the agency is good. Because, clearly they wouldn’t send you to someone that would say otherwise, but rather ask the reference what challenges you encountered and what you should expect. You should also let the reference know that you’re not digging for dirt, but rather you want to be prepared for anything. It’s important to understand what the experience of working with an agency will be like. Are they pleasant? Responsive? Do they get involved, or are they far removed from the clients they work with? Referrals can bring to light these more qualitative and personal experiences.

Use the following questions to provide insight into what you could expect from a partnership:

• What they like and what they feel can be improved?
• How was the responsiveness of their point of contact?
• What types of results were delivered?
• How long did it take to see results?

B. Dig into their Case studies

Although you’ve read the best case studies on their website, make it a point to ask for a case study demonstration. Keep in mind that case studies are not meant to exhibit their experience in your industry, but the creative team’s overall style.

Instead of just looking at the numbers, try understanding the strategy behind the success. You could use the following questions to gain more insight:

• What were the target numbers?
• What was your strategy to achieve the target?
• How many people worked on this campaign?
• How long did it take to execute this campaign?
• Time spent on testing the campaign?

What results did they get for previous clients?

Make sure the results are inline with your goals. It could be finding out improvements in conversion rates, visitor count, reducing PPC costs, obtaining links, social shares etc.

C. Look at their strategic capabilities

According to the recent surveys, most agencies do not have a documented success strategy, and this will be reflected in their return on marketing initiatives. Therefore, it is critical to find a marketing agency that has strong strategic capabilities. This means more than just having a head of strategy – the agency should have a consistent approach, a strong methodology, and most importantly, a good track record.

After looking at their case studies, get in touch with their clients.

• How have they helped other brands develop successful content strategies?
• What kind of approach have they taken?
• How does that translate to how they could help engage your audience, enhance your marketing strategy, and achieve your business goals?

D. Ask them about a time that they failed

The reality is that not all strategies or campaigns meet the desired outcome. Asking for an example of a time a strategy failed and what they’ve learned from that experience shows that they’re willing to own up to mistakes and learn from them.

E. Time-frames look too good to be true?

Driving more visitors, leads or sales to your online store or business definitely takes time. If the digital marketing agency is promising to get you x amount of visitors in x amount of time, be very cautious.

An agency that knows their stuff will be setting out short, medium and long term strategies and the potential results to go with each of these time-frames. They should be able to provide a clear picture of your industry, it’s competitiveness of the keywords you want to target and how well your competitors are doing.

F. Check out their reliance on systems for repeatable success

Marketing agencies that lack documented processes and automated system are bound to a dreadful fate. To avoid the hassle of inconsistent services and results from your marketing agency, make sure the agency  you shortlist to work with does the following:

• Complete projects within the given time and budget
• Focus on detail and quality
• Do not feed you impractical and unrealistic goals
• Produce meaningful results that can be measured
• Keep you in the loop with successes, setbacks, shifts in strategy, etc.

G. What sets them apart from their competition?

There’s no shortage of choices when it comes to choosing a digital marketing agency or consultant. Find out what sets them apart and why they are the best fit for your business.

H. What are their weaknesses?

This can be an uncomfortable question to ask but a question that can reap insightful answers. An web marketing agency that is even aware of their weaknesses could be a good choice.

I. What is their track record like For businesses like yours?

Always go for an agency which has dealt with businesses within your niche. By opting for an agency with industry-specific experience as your brand, setting goals and executing campaigns is easier & quicker because are already adept in understanding what makes your target audiences tick.

VI. Understand their deliverables

The single biggest factor which could break or make a deal with an agency is Accountability. The agency should have all the necessary infrastructure and processes in place to demonstrate tangible results and act on the best opportunities for generating a return on your marketing investment. Especially, since the results are now readily available, because direct and digital media allow for intricate levels of measurement to gauge program performance. That’s why you need to carefully scrutinize the agency’s ability to have a culture of accountability and the proven ability to deliver measurable results.

A. How does the agency measure the success of the marketing campaigns they’re recommending?

Marketing is more than just creating the best call-to-action on your landing page or picking the right font size for your homepage. The marketing agency you work with should be able to support their recommendations with data.

When talking with a prospective agency, ask questions on benchmarks, metrics, and analytics. Additionally, they should communicate these jargon-heavy words to you in easy-to-understand chunks.

Aside from asking on what should be measured, inquire on how often the report on progress should be made towards these metrics. Also, what adjustments can be made if data indicates that the campaign is not working?

B. How will the agency consistently focus & report on results?

Request a definitive timeline of when to anticipate reports and campaign updates. They should be able to schedule regular, ongoing meetings with you if they’re well organized and truly on top of their game.

The digital agency also needs to be able to define the “KPIs,” or key performance indicators, that they’ll use to determine whether their efforts are tracking towards achieving your overall goals. For example, if your goal is to increase sales from your email database then some of the KPIs your agency should be tracking and reporting on to you include deliverability rate, open rate, and click through rate.

Any reputable agency will be more than willing to pull out a sample report showing the list of business metrics they use to measure results in any given channel. A sophisticated one may also be able to offer you a real-time dashboard in the cloud that you can access any time.

Note that this process of reporting needs to be be customised to your business needs- not just a set schedule of the agencies standard communications.

C. How often do they report?

A usual reporting schedule is on a per month basis. If you need to keep track more than this you should specifically request it. An agency that reports only once every three months or even greater may be a sign that they are overrun leaving no time to work on your project.

I would recommend that you specifically request the agency for a live dashboard so as to keep a track of all your KPIs.

D. To what extent do they plan to work with your team?

For your campaigns to truly deliver, the agency of your choice should be able and eager to train your in-house team on meeting goals and mapping KPIs. This could include training your team to use automation platforms or interpreting data from the analytics software that they recommend.

Furthermore, an agency who is truly involved in helping you grow your business understands that your team’s subject matter expertise is a critical piece of the puzzle.

• How will they communicate with your subject matter experts?
• How often will they communicate?
• Lastly, ask them about team member/s whom you need to interact with often. What is the availability of this employee?

E. How many hours per week will they spend on your account?

Be specific. Although it’s difficult for an agency to pinpoint the exact amount of time they will be working on your account a rough ballpark figure can help you work if you’re getting value for money.

F. Know more about their customer service

Many digital marketing agencies are great at providing the services you pay for. But do they do anything additional to delight their clients afterwards? Unfortunately, the answer is “no” more often than not. If you value great customer service, seek out an agency that makes sure you’re taken care of, and then some. Your team should always feel like people, not just a number.

G. What is their availability?

Most agencies are 9 PM – 5 PM but some go above and beyond to answer your emails or calls out of hours which can be a lifesaver if you have an SEO emergency!

H. How quick are response times?

Are you left hanging on the phone for 15 minutes on your first call? Not a good sign. Sure, they’re probably busy but too busy to deal with you. Find an agency that answers the phone quickly, respond to emails quickly and can provide support in a digital emergency.

I. Do they provide after-care?

You’re now receiving more visitors after the completion of a 6 month SEO project only to realise there is another keyword you would like to target. A few tweaks of your meta information would do it but you have no idea how. Will your agency do it for you, gratis?

J. When will you see results?

Marketing efforts usually take time to yield positive results. However, once you’ve built a mean marketing machine, you’re in it for the long haul. Think of it as a long-term investment with compounding interest. So be wary of digital marketing agencies who promise that you can expect substantial ROI in a short span of time.

VII. Understand their pricing model

It goes without saying that you want to find a digital marketing agency that provides value for money. That said, you want find an agency that suits the size of your business too. Ad agencies have different pricing models, which obviously depend the client requirement.

You might ask, “Why does the pricing structure matter? If client and agency deem the fee fair for work performed, why does it matter how that fee is computed?”

Incentives drive behavior, and fee structures (not just amounts) influence how an agency serves its clients. In fact, it is so obvious and evident that you can guess an agency’s pricing structure just by looking at their results.

I’d suggest a sensible way for a marketing agency to charge for their services is “capped percent of ad spend.” To understand why,  let’s consider the strengths and weaknesses of other models:

A. What is the agency’s preferred pricing model?

There are a wide range of agency costing and budgeting options for you to understand. The pricing model will vary by both type of agency and client engagement as you seek to agree what is a practical, mutually beneficial remuneration mix. Whichever model(s) you use, the agency should ensure that all elements of activity are captured.

Model 1: Percentage of spend

The most popular pricing model among agencies is % of Spend and the rates range from 5% to 20% of spend. Most agencies prefer this model because of the simplicity in marketing it, simplicity in tracking it and aligned interests.

Theoretically, this model should incentivize an agency to build out and maintain a robust keyword and copy portfolio, capturing value from the long tail. So the better the agency delivers, more will be the client spend. This way both the parties benefit. This also acts as a good indicator of size and complexity. Of course, you have a minimum base fee with which you need to start.

But Percent of Ad Spend isn’t perfect.  You could ask me that the agency could deliberately avoid a highspender just to show a good ROI. Possible! You just need to be vigilant. Also this model gives no incentive to reduce CPA! Sometimes this aspect disincentivizes clients from spending more and also breeds distrust unnecessarily.

This model being so popular, the primary reason why a few agencies look beyond this is because it doesn’t take into consideration the amount of time that needs to be spent on campaigns. While some agencies work on a hybrid model using % spend for ongoing management and hourly flat fees for one-time projects/consulting!

Model 2: Bill by hour

Agencies usually go with this model when they are working with small businesses. This is will deter the client from demanding long calls or make ad hoc data requests. So, if your agency has a bill by hour payment model, then ensure that you get extra time for customer service and reporting.

Most marketers feel that this model motivates to become more efficient while still doing a good job. Others feel that it gives no room for personal skill expansion. The perception changes from agency to agency.

Model 3: Flat fee

This is the simplest of all the agency pricing models. The client pays the agency a consistent flat monthly fee, regardless of ad spend or sales.

Simplicity is a key advantage to the flat fee approach, and it certainly provides the advertiser economies of scale. But it has disadvantages. Going into the deal, neither agency nor client has a firm sense of the true work required. One side is likely to guess wrong, leaving either advertiser or agency disgruntled about pricing. And certain agencies might view a flat fee as a disincentive to hustle. I wouldn’t recommend this model as it is devoid of an incentive structure.

Model 4: Capped Percentage of Spend

I believe the Percentage Ad Spend, Capped, with fast out offers the best pricing model for hiring a agency. Client pays agency a monthly management fee calculated as a percentage of ad spend. Client and agency also agree on a monthly minimum fee cap to protect the agency if the ad spend is very small, and a monthly maximum fee cap to protect the client if the ad spend is very large.

Choosing different values for the min cap, the max cap, and the percentage allow agencies to signal potential clients where they’re positioned in the market place. For example, dividing the monthly min cap by the percentage yields the typical minimum suggested monthly ad spend for target clients.

Model 5: Percentage of revenue

First, under this approach, the agency earns the bulk of their monthly fee via sales on the your brand name. The agency didn’t create the client’s brand equity. These sales don’t reflect the agency’s effort, and brand search is often non-incremental—so why should these brand clicks drive the invoice?

Another problem with revenue share fees is ‘Revenue Attribution’. Here’s the scenario. Searcher clicks a paid link to client’s site, doesn’t buy today but instead signs up for client’s email list, then buys two days later from link in first email received. If the agency and email agency are using different tracking cookies, likely both will “claim” that order. Now, whether that PPC click or that email should get credit for that order is an important and subtle marketing question. It is hard enough for an agency to help clients suss out multi-channel allocation, and I’d suggest an agency can’t provide impartial guidance on this critical topic when their compensation depends on the outcome.

From my experience, revenue share encourages agencies to act like affiliates (stifling data sharing), and revenue share can lead some agencies to “skim” (only tackling low-hanging opportunities). I would suggest you to flatly reject this pricing model.

Model 6: A hybrid model

Most agencies believe that a one size fits all pricing model is increasingly getting obsolete. And that the agency needs to evolve a customized pricing model based on client size, requirement, service and time period.

My recommendation would be that, never consider “Pricing’ as the most important aspect of picking an agency. What matters far more is performance. Compared to an average agency, a great agency can often produce double digit increases in profitable sales, just by building better campaigns and managing them better. For most advertisers, a difference of a few thousand dollars in management fees each month is completely dwarfed by your Google bill, by your resulting sales—and by the gain in profits you could realize from well-built campaigns and smart bidding. Always prioritize ‘Performance’ over ‘Pricing’.

B. What is the agency’s preferred contract period?

The simple logic is that if the contract rate is inversely proportional to the contract period. If the contract period is low then the agency would like to have at least a 6 month commitment.

Usually the agencies ask for a 3-6 month contract to begin (100% required for new builds) to give time for data gathering & operations to take full effect. It typically takes 1 month for developing strategy & restructure and another 2 months to optimize. Either way you should be ready for a minimum 3 month contract.

In the last couple of years most of the boutique agencies seem to be working out a new ‘earn your continued trust’ model! This is a ‘No Contract’ month-on-month subscription model, where their existence would depend on their good performance and client satisfaction.

C. Are they flexible enough?

Working with a new marketing agency can be an expensive venture. Make sure that you are not tied into any long term contracts before you are able to test the service that they provide. If the agency is confident in their service, and that you will keep coming back to them, they should be more than happy to work on a project by project basis.

Essentially, finding the perfect Digital Marketing Agency to work with will depend on whether they are a good fit for your business type, if they have been successful in the past and if they are experts within the sector they operate in. If you are considering the services of a Digital Marketing Agency and want to discuss your options why not get in touch?

If you run the shortlisted agencies through all the above criteria, you should be able to arrive the agency which is a good fit for you. It is now time now ask the big questions:

Question 1: What should be the budget for the initial campaign?

Question 2: When can we start?

Question 3: What would be the estimated return of investment?

Question 4: What are the deliverables you should expect?

Question 5: What goes into the final contract?

Question 6: When do we sign the contract?

Question 7: What happens if you don’t want to finish the contract?

Step VIII: Signing the Service Agreement

Before the creative discussion begins, certain legal technicalities such as confidentiality, idea ownership, fees, and non-compete clauses need to be addressed and negotiated. You need to ensure that a really solid legally documented confidentiality agreement and conditions, also be steadfast on the legal issues most important to your company.

I. Stay away from restrictive contracts

While contracts are important for protecting both the client and the agency, a good marketing company won’t try to lock you into a contract that doesn’t meet your needs. Many contracts will create a relationship that is longer or more restrictive than necessary. Plus, a company that has you locked into a contract may not be as diligent about impressing you with their results. You can expect a bad marketing company to really pick up their efforts about ten months into a one-year contract in the hopes that they can snag you for another year.

II. Be very clear with the deliverables

Avoid contracts that quote a fee without specifically mentioning the deliverables they’ll be providing.

• What reports will you get from the agency?
• How often will you get reports from the agency?
• Will you get access to a live dashboard? (To monitor the performance of your campaigns)
• Do you get an access to their project management software? This would give you transparency on the status of your works.
• What about status meetings with your team?

III. Anatomy of a typical Agency – Client Agreement

A contract is essential to govern the provision of services to the Client by an Agency. Make sure that you have the provision to make amendments to the contract from time to time, of course with the consent of both parties. Note that in the event of any conflict between the parties, the terms of the Agreement shall control.

(i) Agency Obligations and deliverables

(ii) Client Obligations and deliverables

(iii) Confidential Information; Non-Solicitation

(iv) Rights, Ownership and Usage

(v) Approval of work

(vi)  Legal Clearances and Indemnification

(vii) Client Representative

(viii)  Liability of Agency

(ix) Additional Services, Project Changes

(x) Expenses

(xi)  Time of Payment and Late-Payment Charges

(xii)  Term and Termination

I hope this document is helpful and will hopefully serve as your checklist for choosing the right digital marketing agency for your business! All the  best!