June 13, 2016 10:28 AM / by Joshua Ballard
Do you ever feel like they are keeping you in the dark and feeding you bullshit?
We have spoken with quite a few business owners over the last few months who seemed to not know exactly what their Marketing Agency actually does.
They obviously knew what the desired outcome was, which was that the agency would help them to generate leads, but they had no idea how this was actually being carried out.
Perhaps the most disturbing trend that I have noticed, is that many businesses seem to know that their marketing agency is running social media advertising with Pay Per Click ads making up the bulk of their activities; yet had no idea what their ad budget was.
There is 2 ways to Pay Advertising Costs for PPC
The first option, is to have the agency gain access to your normal payment system and Ad systems, and then have them order the ads on your behalf.
In this system, you pay at least two invoices:
- One invoice to the agency for their work
- One invoice to each advertiser (Google, Facebook, etc)
This system has it’s advantages and disadvantages.
One downside is that it places additional strain on your book keeper (as they must reconcile more than one payment),
One upside is that you don’t have to pay GST to the agency for the adspend.
Paying GST to the agency for your adspend is not the end of the world, as you will obviously be claiming it all back in credits. But what if you are advertising heavily?
This can start to really cut into your cash flow.
The second option, is to have the agency invoice you for the full amount covering their time and fees, as well as the adspend.
In this system, you pay one invoice.
The agency takes the full amount, allocates the ad spend, does their work and your book keeper gets to focus on less transactions and reconciliations.
The downside of the second option can be quite significant however.
The business owners we spoke with, the ones who had no idea about the size of their ad budget, then went back to try and check what their ad budget had been.
When they went back to check the reporting documents from their agency, they couldn’t actually see any dollar figures what so ever.
When they checked their invoice, it still did not reflect what size the ad budget was.
Rather, they were presented with a list of vanity metrics which are actually a little deceptive to say the least.
A vanity metric is a metric that does not really matter in the long run, it is a metric that looks good, feels good, but doesn’t really have any direct measure on whether your business is going to make any money from the activity.
Examples can be (Note: these example metrics are not always useless)
- Total Impressions
- Total Likes
- Total Retweets
- Total Shares
These metrics can be useful in building an audience, but when it comes to PPC, you really want solid numbers on work generated.
The client that went looking for their adspend, could not get an answer from anyone at his existing agency.
To this day he has no idea how much money went to the agency, and how much went to the advertiser.
We pride ourselves on being the most efficient, best communicating, and the most TRANSPARENT marketing agency in Adelaide. We will never play magic cups with the money, you will always know what division of agency cost vs ad costs is at play!