5 Questions to See if Your Ad Agency is Scr*wing You

Let me tell you something that's gonna sting a little: most ad agencies are happy to take your money while delivering mediocre results.

I've talked to hundreds of ecommerce founders who are bleeding cash on agencies that promise the world and deliver a sandbox. The worst part? Many don't even realize they're getting fleeced.

Here are 5 dead-simple questions to figure out if your agency is actually helping you grow or just helping themselves to your marketing budget:

1. Do they obsess over ROAS instead of actual profit?

Return on ad spend (ROAS) is the vanity metric agencies love to flaunt. "Look at this 5X ROAS we got you!" But here's the truth bomb: ROAS doesn't pay your bills. Profit does.

Ask them: "How are you measuring the impact on my bottom line, not just top-line revenue?"

If they start squirming or throw more acronyms at you, they're hiding something. A good agency knows that a 2X ROAS campaign that scales to $1M in profit beats a 10X ROAS campaign that only generates $50K in profit.

2. Are they actually running experiments?

The digital ad landscape changes faster than cryptocurrency prices. What worked last month might be burning cash today.

Ask them: "What are the last three experiments you've run with my ad dollars, and what did you learn?"

If they can't immediately tell you about recent tests, control groups, and concrete learnings, they're running your campaigns on autopilot. You're paying premium prices for a glorified "set it and forget it" operation.

3. Do they own your ad accounts?

This is a massive red flag that screams "future hostage situation."

Ask them: "Who owns the ad accounts, pixel data, and audience lists?"

If the answer isn't "you do," then you're building a business on rented land. When (not if) you part ways, you'll be starting from scratch while they keep all the valuable data you paid to generate.

4. Can they explain their fees in one sentence?

Complexity breeds confusion, and confusion is where profit margins hide.

Ask them: "Explain exactly how you make money from our relationship."

If they launch into a complicated explanation about management fees, performance bonuses, media markups, and creative costs, they're probably baking in fat margins at every turn. The best agencies have transparent pricing you can understand without an economics degree.

5. Do they know your numbers better than you do?

Your agency should be frighteningly familiar with your unit economics.

Ask them: "What's my average customer lifetime value and how does it impact our acquisition strategy?"

If they don't know your margins, LTV, inventory costs, and cash flow constraints, they're shooting in the dark. They should be tailoring campaigns around YOUR business goals, not industry benchmarks.

The Bottom Line

Look, I'm not saying all agencies are bad. There are some absolute killers out there who will transform your business. But they're the exception, not the rule.

Here is my preferred ad agency partner, ThePixelTheory.com. My friend Graham runs it, I’ve known him for 10+ years and wouldn’t trust anyone else to run my brands accounts.

If your agency failed more than one of these questions, it's time for a serious conversation or a clean break. Your marketing dollars deserve better than to fund someone else's lifestyle business.

What's been your experience with ad agencies? Hit me up in the comments with your horror stories or agency wins.