How to Tell if a Digital Agency is Transparent
Navigating the world of digital ad buys and omnichannel campaigns can be nearly impossible without help, leaving simple trust in your agency as the only obvious option. But with high profile cases of opaque digital agency practices coming to light this year, now is a better time than ever to learn how to find out if a digital agency is transparent. In this blog post, we will share a few ways you can assess your next agency.
How does the agency charge commissions?
Although there are many ways a digital agency can charge you, we will discuss two of the most common methods: cost per impression and percent of ad spend.
Cost per impression
One popular agency cost stucture is to charge by cost per impression (CPI) or cost per thousand impressions (CPM). For some campaigns in which impressions are the main goal, such as branding campaigns, CPM is a viable way to charge commissions. However, audience targeting can have a significant effect on the campaign’s price. You pay for a certain number of impressions; if the agency reaches it with half the cost, agency keeps the change as the agency is charging on impressions alone.
For example, a service aimed toward doctors in a specific city would require an audience of doctors in that city. However, impressions are more expensive for smaller, niche audience segments. In this scenario, the agency could target doctors across the country to save money and never tell the client. To prevent that kind of situation, always ask for complete reporting on audience targeting.
Percent of ad spend
Your agency can also base its commission on a flat percentage of the overall ad spend with no markups. This commission structure leaves the least room for price manipulation, making it the most transparent option. Since the commission is based on the actual paid media, there is no incentive for agency to use less expensive audiences.
Here’s a professional tip. Perhaps the most important one in this whitepaperblog. Most DSPs allow agencies to manipulate the report to “cushion” the spend. Ask your agency whether numbers are raw or inflated.
Does the agency offer clear reporting on campaign performance?
You have a right to know how your campaigns perform, even if they perform poorly. A good digital agency will clearly report the results of every campaign and work with you to find ways to improve your next one.
Campaign reporting should include:
- A creative summary
- Audience targeting
- Detailed budget information
Most DSPs, the platforms through which agencies manage display ad campaigns, also allow agencies to give clients read-only access. That gives you real-time access to your campaign performance, allowing you to see exactly what your agency sees. Few agencies directly offer this feature, so it is a good idea to ask your agency for access even if they don’t initially offer it to you. If there are a lot of awkward pauses, you may have uncovered something nefarious.
Verifying a digital agency’s transparency isn’t difficult—you just have to know where to look. If you would like to learn more about assessing digital agencies, you may be interested in our new whitepaper, The Insider’s Guide to Choosing a Digital Agency. We are a digital agency ourselves, and in the whitepaper we share some of the lessons we have learned about transparency. Click here to get started.