After spending a big part of my career on the advertiser side where I bought media in more than 20 countries with 30+ different media agencies. I moved to the other, darker side. And took a management position of a media agency in a developing country. I learned a lot and it made me realize how valuable it is to find an honest and reliable media agency.
Picking a media agency is a long process. So you’d rather be diligent in the screening. After understanding “how do media agencies earn money” here are 6 questions to make sure your media agency (or future) is reliable and honest :
How much is your headcount ?
Ask few different people separately how much is the total headcount of the company. Small or dishonest agencies will tend to be very evasive. Wanting to make themselves look big. So it’s not a bad idea to ask this question and compare answers. We had a case where I said 30 people and one of my staff half an hour later said we were 50. It did not make a great impression.
How much is your billing per year ?
Same as above – you will see a lots of fantasy when asking around this question.
Are we buying the media from the networks or from you as an agency ?
If you buy from the networks, then you pay the price asked by the network and the agency applies a percentage fee to it. If you buy from the agency then most likely the agency is buying a bulk number of spot and them reselling it to clients. In such a case the agency is paying 100€ for the spot and reselling it for 120€ and then applying their commission rate to the 120€.
Asking this question will generally make the agency realize that you know your stuff. They may be less confident pulling out stunts on you.
How much people will be working on my account ?
This is a good question. The agency will often wanna make you look important to them. And inflate the number of people that will be working on your account. Then try to understand how much those people would cost. And if the commission that was agreed makes sense.
For example :
- You agree on 5% commission on 1m€ TV media per year
- Means : 50k€ commission for the agency
- The agency tells you that you will have 2 Junior full time media buyer and one senior media buyer half time.
- Average salary for the Junior : 30k€ per year
- Average salary for the Senior 45k€ per year so 22.5k€ half time.
- Total : 30+2+22.5 = 82.5k€
- So approximate cost (82.5k€) > approximate return (50k€)
There must be something fishy here.
How do the kickback agreements look like between you and the networks ?
Some agencies will be transparent about it. Some agencies will tell you they do not earn any kickback. Anyhow, their reaction during the meeting should be very representative. It’s a question that does not come that often and should throw the agency off balance. Anyhow, it’s a good question to ask to show how knowledgeable you are.
Can I have access to the Facebook and Google dashboard ?
The most honest agencies will have absolutely no problem giving you dashboard access. If your agency starts panicking when you ask for it. Then it’s a good sign to dig deeper. The truth is that if your agency do not want to give you dashboard access it’s most likely because they are highly trading. For example : buying cost per click 0.5 cents and selling you back for 1€ per click. The agency might use the following answers to distract you :
- “If we give you full dashboard access, you will see all our clients, so we cannot give you access.” To be honest, I had to use this in a meeting. The client did not know marketing at all and it worked. But of course it’s a lie.
- “We never give access, it’s part of our company policy to protect our intellectual property”. It’s true that sometimes clients get the agency to create the account then after 1-2 months cancel the agreement with the agency and execute the campaign by themselves. As a digital agency your knowledge lies in creating and optimizing campaigns. However, as a client, you can still ask, during a meeting, for the account manager to open the dashboard to make sure that the costs between reporting and dashboard match. It’s a difficult question to ask, so you can always tell it comes from your compliance department.
- “All our clients trust us and never ask for any dashboard access – you don’t trust us?”. In this case the agency tries to play the card that they are hurt that you even ask. It’s just an act and such an answer should be a big, big red flag.
- “We cannot give you access, but we can send you some screenshots”. Another red flag. Screenshots will be doctored. Digital media agencies have designer in-house. We did it. I am not proud.
All in all, please remember that Facebook & Google have the commercial position that the data belongs to the brand and not to the agency. So if you have doubts whether the agency is reporting the right costs or not, just contact Facebook or Google and tell them you wanna get the media budget spent for a specific time period.
Keep in mind that the more you try to prevent the agency from trading and earning on your behalf, the less the agency will monetize you, the less service you will get.
So all of it is a balance you need to find. Sometimes dishonest agencies achieve great results in terms of performance. Make sure about what is important to you. Performance or transparency.