Many digital agencies talk a good game when they pitch clients. They talk about improved performance, huge increases in sales and leads, lower acquisition costs and better returns on your advertising spend. It all sounds amazing at the start.

They’re highly engaged during the first few months, regularly communicating with you, making recommendations and showing you all the opportunities they see in your business.

Then, over time, the attention can start to drop off.

The agency becomes less proactive, communication becomes less frequent, and instead of actively looking for ways to improve your advertising performance, they start doing the bare minimum.

Unfortunately, this can be a common problem with digital agencies.

Why digital agencies can struggle to give your business enough attention

Advertising is only one part of digital marketing. There are many other activities an agency may be responsible for, including:

The list goes on.

Each of these activities can be extremely time-consuming when done properly. SEO alone can involve keyword research, technical improvements, content creation, link building, competitor analysis and ongoing monitoring. Advertising requires constant analysis of campaigns, audiences, creative, bidding, budgets and conversion data.

Now imagine having to do all of that for 20, 30 or even 50 clients.

Suddenly, the agency is under pressure to deliver the same level of service across every account. They either need to hire more people, increasing their overheads, or find ways to spend less time on each individual client.

And that is where the problem can start for you.

Your agency may still be doing something every month, but that doesn't necessarily mean they are actively optimizing your account or looking for meaningful opportunities to improve your results.

You can end up paying for an agency that is technically managing your advertising, while receiving very little strategic attention.

The problem with advertising metrics

Every time you meet with your agency, they may present you with a report full of impressive-looking advertising metrics.

You might see improvements in click-through rate, cost per click, conversion rate, impressions, reach, engagement or platform-reported ROAS.

The problem is that many of these metrics don't directly tell you whether your business is actually making money.

Advertising platforms are designed to report on the performance of the advertising they deliver. That doesn't necessarily mean they provide the clearest picture of your overall business performance.

For example, your agency might tell you that your Google Ads campaigns generated a 6x ROAS.

That sounds great.

But what if your overall online revenue hasn't increased?

What if you are spending significantly more than you were six months ago to generate roughly the same amount of revenue?

Or what if Google is claiming credit for customers who would have purchased from you anyway?

This is where advertising reporting can become confusing.

The attribution problem

Ad platforms also have their own attribution models, and this can make performance look better than it actually is when viewed in isolation.

For example, a customer might first see your brand through a Meta advertisement. They don't purchase immediately. A few days later, they search for your company on Google, click one of your Google Ads and then make a purchase.

In that situation, both Meta and Google may have played a role in the customer's journey.

But if both platforms are allowed to claim credit for the conversion, you can potentially end up with two platforms claiming responsibility for the same sale.

This isn't necessarily fraudulent or even incorrect. Advertising can influence a customer at multiple points throughout their buying journey.

The problem is that it makes it difficult for a business owner to understand the true incremental impact of their advertising spend.

You can go further down the rabbit hole with attribution modelling, multi-touch attribution and other measurement techniques. These can be useful in certain circumstances, but they can also introduce another layer of complexity that makes reporting even harder for a busy business owner to understand.

Ultimately, you need a simple way of answering one fundamental question:

Is the money we are spending on advertising generating enough revenue for the business?

So how can a busy ecommerce owner keep tabs on their digital ad agency?

It comes down to your revenue.

One of the simplest high-level metrics to monitor is your Media Efficiency Ratio (MER).

Your MER looks at your total online revenue compared with the amount you are spending on advertising.

For example, if your business generated $20,000 in online revenue and spent $5,000 on advertising, your MER would be:

$20,000 ÷ $5,000 = 4.0 MER

This gives you a much broader view of advertising efficiency than simply looking at what an individual advertising platform says it generated.

It also gives you a number that is relatively easy to understand.

You don't need to understand every Google Ads metric, every Meta campaign or every attribution model. You can simply monitor how much revenue the business is generating relative to how much you are spending on media.

What is a good MER?

That's probably a conversation for another day because there isn't a single MER number that works for every business.

Your target will depend on your gross margins, average order value, repeat purchase rate, operating costs, product category and overall business model.

A business with very high margins may be able to operate successfully with a different MER than a business selling lower-margin products.

That said, as a general rule of thumb, an MER below 3.0 can be difficult for many ecommerce businesses because advertising is only one of your costs.

You still have to pay for products, shipping, staff, technology, payment processing, warehousing, returns and all of the other costs involved in running an ecommerce business.

At the other end of the spectrum, an MER of 6.0 or higher can provide considerably more room for those other costs and potentially profitability.

The important thing isn't to blindly chase a particular number. It's to establish a target that makes sense for your business and then monitor whether your advertising activity is helping you move toward that target.

Admeriq gives you up-to-date ROAS and advertising performance data over the past 30 days, so you don't have to wait until the end of the month to understand how your advertising is performing.

That can make it easier to make budget decisions and keep an eye on your overall advertising efficiency, regardless of the more complicated metrics your agency provides.

Don't let your agency convince you to spend more without evidence

Digital agencies will sometimes tell you to keep spending because advertising takes time to reach your audience and generate results.

There is some truth to this.

You can't necessarily launch a new campaign today and expect it to immediately generate a predictable stream of profitable sales. Advertising platforms need time to gather data, audiences need time to become familiar with your brand, and customers often need multiple interactions before they are ready to buy.

This is particularly true for higher-value products.

A customer might see your advertisement today, visit your website, leave, read a review a few days later, return through Google, compare you with a competitor and finally make a purchase several days or weeks later.

That doesn't mean every increase in advertising spend is justified, though.

If your agency recommends increasing your budget, they should be able to explain why.

What opportunity are they seeing?

Which campaigns are performing well enough to justify additional budget?

What is the expected impact?

What has changed since the last recommendation?

And, most importantly, is the additional spend actually producing additional revenue?

Increasing your advertising budget should be based on evidence rather than simply the assumption that "more spend equals more sales."

How do you know if your ad agency is optimizing performance or just cruising?

MER is a useful high-level metric, but it shouldn't be the only thing you monitor.

At the bare minimum, your agency should be providing you with a meaningful monthly performance report that explains what happened, what they changed and what they intend to do next.

A good report shouldn't simply be a collection of graphs and advertising metrics.

It should answer straightforward business questions:

The difference is important.

An agency can send you a 30-page report every month and still provide very little insight.

On the other hand, a concise report that clearly explains what happened and what the agency is doing about it can be far more valuable.

Are they actually doing what they say they are doing?

This is another important question to ask.

Agencies will often provide recommendations during meetings. The real test is whether those recommendations actually turn into actions.

If they say they are going to test new creative, did they?

If they say they are going to restructure campaigns, was it done?

If they identify a poorly performing audience, did they adjust the targeting?

If they identify wasted spend, did they reduce or eliminate it?

If they recommend landing page improvements, were those changes actually implemented?

Over time, you should be able to see a clear relationship between what your agency says it is going to do and what it actually does.

If every monthly meeting sounds positive but the same problems keep appearing month after month, it may be worth taking a closer look at how actively your account is being managed.

Consider getting an independent advertising audit

Sometimes it can be worthwhile having someone independent review your advertising account.

This doesn't necessarily mean you need to replace your agency.

An independent audit can simply give you another perspective on whether your account is structured correctly and whether there are obvious opportunities or areas of wasted spend that your existing agency has overlooked.

There can be relatively straightforward issues hiding inside an advertising account.

For example, an account might have poor negative keyword management, meaning you are paying for searches that aren't relevant to your business.

Another example is excessive bidding on your own brand name.

Brand search campaigns can have a legitimate role, but if customers are already likely to find your website organically when searching for your brand, you should understand exactly what incremental value you are getting from those paid clicks.

There can also be issues around campaign structure, audience targeting, creative testing, budget allocation, conversion tracking and bidding strategies.

An independent review can help identify these issues without relying solely on the agency managing the account to assess its own work.

Start with the number that matters most

There are hundreds of metrics you can look at when running online advertising.

But as a business owner, you don't necessarily need to become an expert in all of them.

The first thing to get right is your Media Efficiency Ratio (MER).

Without sufficient revenue relative to your advertising costs, your business ultimately can't sustain itself, regardless of how impressive your advertising dashboard looks.

That is where Admeriq can help.

Instead of logging into every advertising platform and manually calculating your performance, you can integrate your advertising platforms into Admeriq and monitor your advertising performance against your actual online revenue.

Your agency can continue to provide all of the detailed campaign metrics and attribution data, but you also have a simple business-level number to keep an eye on.

Because ultimately, the question isn't whether your agency can show you more metrics.

The question is whether your advertising is helping your business generate enough revenue to make the investment worthwhile.