I’m going to start by saying that I’m sure some ad agencies are good, full service agencies that will promote your product, track results and make adjustments to the ad campaigns so that you’re getting the most for your money. The problem is I’ve never personally worked with one. I only use ad agencies because they offer discounts on ad mediums that I picked for myself to advertise with. I never let them make up the ad campaigns.
I worked for an online sportsbook in the late 90’s and saw first hand how the ad agencies worked with them. They worked with a few mid-range and a couple of huge ad agencies. Knowing that ad agencies make their money when they buy ad space for you, is the key to understanding how this all works. How much they make depends on the discount they get from that ad medium. The ad agencies job is to run an ad campaign that makes “you” the most money possible. That’s what their job is “supposed” to be, but this is weighed against them selling you ads that make “them” the most money. Think about it. First they ask your “ad budget” for the month. You tell them $ 500,000. Now there’s a group of great performing ads available that they know you’ll do well with, but the agency will only makes 10% on the deal. Then there’s a group of crap ads that the agency makes 40% on. Let’s see, in one month the company can make $ 50,000 profit off of you if they put you into the great performing ads or they can make $ 200,000 profit off of you by putting you in the crap ads. I wonder which group of ads they’re going to choose? This is the same thing that happens with stocks and a few other businesses. Many times your best interest is not the goal of the company.
The answer to how the ad agency will handle your ad campaign depends on if they see any future business coming from you, or if you were referred by a good customer they already have. If it’s a one time shot and they know it, you’re getting the crap ads and they’re scamming the $ 200,000. Any other scenario, and your results will vary, anywhere between half great and half crap.
If you would like to learn all about my experiences in business, visit my website for over a hundred articles on a number a various business topics from starting a business, marketing down to when it’s time to sell the business.
The ad agencies the online sportbook worked with just put their ads into anything and everything. They burned up $ 1 million in a year with crap ads and scammed an easy $ 400,000 from them.
Like I said earlier, I use ad agencies to get deals on places where I already know I want to advertise. I listen to their suggestions, but realize they could be, and probably are, very biased.
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