Choosing a Performance Marketing / Paid Media Agency

15 June, 2020


Josh Duggan

Josh Duggan

Working in paid media for over 8 years. Specialises in Google Shopping and paid social. Spoken at various eCommerce events around the world about paid media and Google Shopping.

Selecting a paid media or performance marketing agency is a complex process - get it right and the rewards speak for themselves, but get it wrong, and the result could be serious. This guide should help you to make all the right decisions along the way to choosing the right agency for your project.

As a person with responsibility for digital marketing, one of the most important decisions you will find yourself making is which online marketing agency to hire. Typically, you will agree to an initial contract that can last up to a year. Additionally, vetting and integrating a new agency can be a disruptive piece of work, so it’s something you need to be good at and to get right. The problem is, it’s something you’ll only do a relatively small number of times throughout your career, so it’s something that’s hard to learn through repetition. Fortunately, there is a process that should give you the information you need to make the best decision possible.

The basic view of this is something that you will have seen before and hopefully one you already follow in bringing in any new resource, be it technology or human:

  • Gather requirements

  • Prepare a brief

  • Send out your requests for proposals

  • Listen to and assess pitches

  • Decide based on your requirement criteria

  • Negotiate and sign

Of course, there’s a lot of detail hidden in each of those steps, so let’s examine each one in turn.

What do I need an online marketing agency to do?

It goes without saying that not all agencies are the same. They have different skillsets, ways of billing and customer expertise. Simply going to a set of agencies and saying ‘I need help with online marketing’ will result in the agencies giving you advice based on what they do well, not necessarily what you need (good agencies will dig into it and ask you some questions). This process is about assessing who you think will best achieve your goals, so this is your starting point. Depending on your experience and what resources you have in house, you may be able to give a detailed view of what channels you need support with, what the KPIs are and even what it is that needs doing.

The good news is that if you don’t have this background, all is not lost. At the very least, you will be able to write down what you expect the results of your media activities to be - for example, market growth, customers acquired or return on investment. This more general approach may mean you need to go through a couple of different rounds of pitching as you work out what process will be best, but it does mean you’ll be able to access expertise from a wide range of different agencies. You should also have a think about what you require in the form of reporting, calls or agency visits to the office.

Once you have this, you need two separate budgets to complete your requirements - your media budget and your agency budget. You may or may not chose to to share the agency budget with prospective agencies, but you should have an idea of what you want to spend.

Once you have all of these you can write up a basic brief, including a prioritised list of requirements.

Online marketing agency - request for proposal and pitch process

Using your internal brief, you can then write up a request for proposal. This is a short document that you send to agencies inviting them to pitch for your business. In this document you should make clear what it is you want to see from agencies during the process, and how you are going to make your decision. This process can be time consuming to get right, so you want to make it clear to agencies what you expect to see so you don’t need to follow up and ask more questions. Remember, you control the process, so the responsibility for communicating and getting quality proposals is yours.

Typically, you might ask an agency to come back with a proposal that includes

  • Background and expertise of agency

  • Details of clients and testimonials

  • A meeting with the people who you will actually working with, not just the sales team

  • How often client managers change

  • What they expect to be able to achieve with the budget you’ve set out

  • How long it will take to get up and running

  • If you have already given then access to your accounts (if you’ve set them up already), a detailed audit of where you are and how they’d take it forward

  • Any potential conflicts of interest

  • The size and financial stability of the agency

  • How many clients each manager has

  • How much they charge, and how they charge (eg flat rate, daily rate, percentage of media spend

  • Your timeframe

In compiling a list of potential agencies, it’s good to get recommendations from people in the industry - reputations are pretty well known and once you’ve asked a few different people you should begin to build up an idea of who is good. It’s also worth trying to create contrasts between agency type - channel specialists, general marketing agencies, large and small agencies. If you don’t have any connections, this might be a sign that you should bring on an independent consultant to run the process for you - it does add extra cost but the expertise and time saved outweighs the cost of hiring the wrong agency and getting poor performance.

It’s likely that a few of the agencies you contact will not be able to take part in the pitching process, either because of capacity, client conflict or not being able to work with the budgets you have set out. Once you have a long list, rather than getting every single one to come in and pitch, it’s worth doing short calls with them to try to narrow yourself down to a shortlist of three who will come in and present to your team.

In the pitches, whether it’s in person or over the internet, it’s important to have a few different people involved at your end, all of whom are aware of the decision making criteria. Especially key is the person who will actually be working with the agency on a day to day basis, whether this is you or another member of your team. Chemistry and trust are key parts of the long term relationship so don’t ignore red flags, even if all other boxes are checked.

It’s also worth paying attention to what questions they are asking you about your strategy and your business - you want an agency who will look to understand how your business runs, what the commercial dynamics are and how they can best feed back into this.

How do I make the choice of which online agency to go with?

Hopefully, you will have shortlisted well and you will have two or three good options. At this point, the set of requirements and priorities you set out at the beginning comes through - you should be able to give each agency a score on each of the five or six key criteria. Whether this is close or not, it’s very important to verify your decision by talking to some current or ex clients. Agencies will be able to put you in touch with them, and obviously they will recommend those with whom work has gone well, but it’s a big red flag if they do not. You can use this time to confirm some of the details they’ve given you in terms of impact, communication style and quality of work.

If your final decision comes down to two agencies who you think are good, then it’s worth negotiating with both of them but being open about what you are doing. You may well chose to work with one of the unsuccessful agencies down the road so you do not want them to be left with the impression you were using them to get a better price from the agency you actually want. It almost goes without saying that the cheapest option is not always the best option for your business - what you save in cost you may lose in terms of delivery or ability to scale in the long term. In the course of your negotiation, pay special attention to the terms of payment and length of the initial contract, including whether there are any break clauses and whether these are one way or two ways. You also want to make sure that things that are important to you such as time spent on site, or frequency of reporting, are written into the contract. A successful negotiation is a win for both sides - agencies need to make money to continue to operate, which means charging clients at a rate they see as reasonable to cover their costs and pay, retain and attract talent to their business, something that benefits you as a client in the long term.

You may also like