Paid advertising is the one marketing purchase where you can see the money leaving in real time, which ought to make agency selection easy and somehow does not. The complication is that you are buying two things at once: the media, which is auctioned and largely outside anyone's control, and the management, which is the agency's actual product. Most proposals blur them, most reports blur them, and the result is that a business can spend a year unable to say whether it is paying for skill or for a spreadsheet. This page sets out the fee models and what each one incentivises, the accounts and data you must own before a single dollar is spent, the advertising rules that apply to the creative, and what to measure so the answer is not simply the platform's own opinion.
The four fee models and what each one rewards
A share of spend is the most common model and the easiest to administer. It also rewards spending more, which is fine while budgets are growing and awkward when the honest advice is to cut a campaign. A flat monthly fee removes that conflict and introduces another, since the agency's margin improves the less time it spends on your account, so a flat fee needs a deliverables list attached. Hourly or project pricing suits audits, builds and migrations rather than ongoing management. Performance pricing, a fee per conversion or a share of attributed revenue, aligns interests on paper but depends entirely on an attribution model both parties trust, which is exactly the thing that is hardest to agree in paid media. Hybrids are common and usually sensible: a base fee covering delivery plus a component tied to an outcome you both measure in a system you own. Whatever the model, insist that media spend and management fee appear as separate lines on every invoice and every report.
What you must own before the first dollar is spent
This is the term buyers regret most often. The advertising accounts should be created under your own billing and business identity, with the agency granted access as a user, never the other way round. The same goes for analytics properties, tag containers, conversion definitions, remarketing audiences and any first party data uploaded to a platform. The reason is not distrust, it is continuity: campaign history, conversion history and audience lists are what make an account cheaper to run over time, and an agency owned account takes all of it with them when the relationship ends. Ask specifically who holds the account, who is the billing entity, and what the offboarding process is, and get the answer in the contract rather than in an email. A good agency has done this many times and will have a documented process. A refusal is the clearest signal available in this category.
The rules that apply to the advertising itself
Whatever platform the media runs on, the creative is advertising and the FTC's standards apply to it. Claims must be truthful, not misleading and substantiated before they run, and that includes performance claims, pricing claims and comparisons with competitors. Where a qualification is needed to keep a claim from misleading, the FTC's guidance on making disclosures effective in digital advertising is clear that it must be clear and conspicuous: near the claim, hard to miss, and not left to a landing page footer or a scroll the reader will not perform. If any of your paid programme uses content formats that resemble editorial, the FTC's native advertising guidance requires that consumers can tell it is an ad. And if creators are paid to promote you, material connections have to be disclosed. Ask a prospective paid ad agency who reviews claims before they go live, because in most agencies the honest answer is nobody, and the liability sits with the advertiser.
Measuring management, not just the platform's own scorecard
Every ad platform reports favourably on itself, so a report drawn only from platform data answers the wrong question. Look at four things. Cost per acquisition and, where you can, contribution after cost of goods, read from your own system rather than the ad account. Account level structure and hygiene: how many campaigns are actually active, whether search terms are being reviewed and negatives added, whether creative is being refreshed, and whether budget is moving toward what works. Incrementality: at minimum, what happened to total enquiries when a campaign was paused, since brand terms in particular often report conversions that would have arrived anyway. And lead quality, checked with sales rather than counted in a dashboard. When you compare a shortlist for a Google ad agency, ask each one which of these four they report on by default. The answer separates account managers from operators quickly.
Questions people ask about paid ad agency
Is a share of spend a bad fee model?
Not bad, but conflicted. It rewards larger budgets, which is uncomfortable when the right advice is to cut. It is workable with a floor, a cap and a deliverables list, and with reporting that shows cost per acquisition rather than spend and impressions alone.
Who should own the ad accounts?
You should, under your own billing and business identity, with the agency added as a user. Campaign and conversion history make an account cheaper to run over time, and an agency owned account takes that history with it when the relationship ends.
How long before paid advertising is judged?
Weeks rather than months for direction, though a new account needs enough conversion volume for the platform's automation to learn. Judge structure and hygiene from the first weeks, cost per acquisition once volume is sufficient, and incrementality once you have paused something and watched what happened.
Who is responsible if an ad makes a claim we cannot support?
The advertiser, primarily. FTC guidance requires claims to be truthful and substantiated before they run, with any qualifying disclosure clear and conspicuous. Agree in the contract who reviews creative for claims before it goes live, because in many engagements nobody does.