I used to scoff at the term “performance agency.”
Doesn't every brand want performance? Why even say it?
It felt superfluous.
But after my stint working at one of the biggest marketing companies in the world, I now know why “performance” has become a necessary distinction.
And in fact, if your company isn’t intentional about finding an agency partner who is transparent about their work and willing to be held accountable for your brand’s performance, then you might become another victim of badvertising.
Early when I began working at a top three marketing agency, we were advertising for a Fortune 50 company, who was spending millions of dollars a quarter on digital advertising. My boss plainly stated that my number one priority was to spend the budget exactly. My team would be far happier with me if I spent the budget to the cent with terrible performance rather than if I spend 80-90% of the budget and had stellar performance.
In short, they made it clear to me that spending the exact client budget took precedence over driving great results.
That wasn’t a one time instance of badvertising.
I often faced internal pressure from team members working in planning to spend more. They had tens of thousands of dollars dropped in their laps that absolutely had to be spent somewhere. Bouncing between programmatic, search and social, their job was to get people to commit to spending more, regardless of whether it made sense for the business.
Often times, I would argue with the folks in planning that I didn’t recommend increasing budget because performance has been poor. When a campaign isn't working out, I told them, my instinct is to lower spend, and test until we find something that works. Only then, when we have some proof at a lower level, does makes sense to scale.
But not spending the budget (or pushing it to another quarter) was not an option. Larger advertising agencies don't work this way. There are too many teams are working on too many different floors. Specific product lines are allotted budgets and have to spend it, whether or not it makes sense for the client.
When everyone is zeroed in on their portion of the assembly line, no one can see that the whole machine isn’t working.
Believe it or not, much of my time as an account manager was spent in the billing system. Rather than thinking of smarter copy to improve click through rates on ads, or rethinking campaign strategy, I poured hours in filling out billing details. This involved entering in the billing amounts designated for each campaign, the ad ids for each ad and updated monthly the amounts spent on campaign. All to ensure the budgets were spent accordingly.
That's not to suggest that our team never spoke to our clients about performance. We certainly did, but it was a high level discussion, and much of it focused on how budget pacing was doing.
My experience made one thing apparent to me: We were a “budget agency.”
Which is another way of saying: Have a big budget? We’ll spend it.
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This form of badvertising is not ad fraud, it’s simply bad work. But it happens more than you might think, and it’s still dangerous, as it wastes a tremendous amount of time and money. (Read the difference between fraud and bad work in our previous post!)
If you want to make sure that it doesn’t happen to your company, consider asking your team these three questions for holding your agency’s feet to the fire. Think of them as filters for assessing if your ad agency is overly budget minded.
1. Do you have frank discussions about performance, especially when it hasn’t been great? No matter how adept your marketing agency is at managing your campaigns, every ad account will at some point experience subpar results. But don’t let that be a reason to avoid conversations. Part of any honest agency relationship is acknowledging when things aren’t working, and unifying on ways to remediate. Plus, greater trust is built on both sides of the relationship when both client and agency acknowledge that something isn’t working. And that trust pays off over the long term.
2. Has your agency ever suggested reducing spend during low performance periods? Brands should know that some agencies may want to maximize spend no matter what, as their payout might be a fraction of that spend. But that’s not in the best interest of the client. Transparent marketing agencies are more likely to suggest lowering marketing spend to align with client goals. They trust that doing so builds a stronger, long term relationship. Metric recently had a client whose cpa’s were getting too high, so we recommended spending less than the budget originally allocated. It stung to cut initially, but the client appreciated the honesty and the solution. We got cpa’s to a more efficient spot, and then we were able to scale responsibly.
3. Do reporting calls center around driving your goals or pacing? Do you feel the metrics are transparently reported? Weekly or biweekly client calls can’t just be about pacing. The focus should be around client goals, i.e., cpa or roas, not just how much money they’ve spent so far. I used to jump on calls that would waste most of the time showcasing to clients how we spent their entire budget in a given month, rather than reporting more specific and relevant metrics. If you’re working with an agency, make sure to pay attention to what the headlines are. When they bring up the conversation about spending more money, hold their feet to the fire. Make sure they’re coming from a place that matches your business goals, and not just their own misguided priorities.
Considering these questions will help illustrate your agency’s priorities, and that will help validate whether they’re aligned with yours. And if they’re not, that might be a sign that you have become a victim of badvertising.
Here at Metric Digital, we take pride in being a performance agency. Our specialty is making sure that your business goals are also ours, and we do everything we can to drive the possible best results toward those goals. Even if that means not spending every dime every time.
P.S. Metric is also taking a stand against big agency malpractice. Check out our new book about badvertising. (Make sure to download your free chapters!)