"Although I started web advertising, I'm not seeing the results I expected." "I want to leave it to a specialized agency, but there are too many options and I don't know which one to choose." Many business representatives share such common concerns.

This article is not just a simple list of advantages and disadvantages. As an experienced consultant, I will uncover the five traps in choosing a web advertising agency that are truly important yet 90% of people are unaware of. From the "real meaning of fees" to "the most common mistakes," as well as the often-overlooked "long-term risks," I will explain the essence of agency selection.

If you read this article to the end, you will be able to see a concrete path to build the optimal partnership for your company without being misled by superficial information like low fees or recognition.

1. "20% fees" are not just "outsourcing fees". They are an "investment" in the time and expertise of a professional team.

The most common pricing structure when delegating web advertising operations is to charge around 20% of the advertising budget as a fee. At first glance, this figure may seem "high," but it is not just a cost. It is a strategic investment to accelerate your company's growth by purchasing the time and knowledge of a professional team.

To be frank, this fee is an essential compensation for ongoing and advanced specialized services needed to maximize results. Specifically, this fee includes the following expert tasks.

• Daily operations and optimization: Daily meticulous account management tasks such as bid adjustments, keyword selection, and review of targeting settings to maximize results.

• Data analysis and reporting: Not only reporting numbers like impressions and clicks, but also analyzing why those results occurred and creating reports that include areas for improvement.

• Rapid response to the latest information: Advertising platform algorithm changes and new feature additions happen frequently. As professionals, they need to constantly track these latest trends and immediately reflect them in strategies.

• Fast execution of the PDCA cycle: Creating multiple patterns of creatives such as banners and landing pages (LPs) that influence advertising results, and repeatedly conducting A/B tests to improve effectiveness.

In conclusion, a 20% fee is essentially an "investment in time and expertise" to delegate these specialized tasks to professionals, allowing your company to focus on its core business.

Running web advertising is not just about buying media slots like mass advertising; it requires continuous adjustments and optimization. This 20% margin is the price required to invest in personnel for these ongoing and advanced specialized tasks.

2. The most common mistake: Mismatch between your company's objectives and the "type of agency."

Grouping agencies as simply "advertising agencies" is one of the most common mistakes in agency selection. There are various types of agencies, each with different areas of expertise and strengths. If you choose an agency without clarifying your company's goals, you will never achieve the expected results.

One thing I always check in the consulting field is whether "you defined your company's objectives before starting to look for an agency." It is the first step to success to identify which type of agency is optimal based on your objectives (goals).

[Professional Insight] Before you start looking for an agency, clearly define your company's objectives. If "increasing recognition of a new product" is the top priority, consider a full-service agency. If "maximizing acquisition efficiency for an e-commerce site" is the supreme mandate, Web advertising specialists should be prioritized. By clarifying your objectives, you can efficiently narrow down potential partners that truly match your company from numerous options.

3. The biggest hidden cost of agency usage: Long-term risk of "lack of internal know-how accumulation."

This is a point that many companies overlook, but the most serious cost of using an agency is not the monthly fees. It is the long-term business risk that arises from completely delegating advertising operations to the agency, resulting in a "lack of internal know-how accumulation."

While short-term efficiency can be achieved, this "know-how hollowing out" can cause serious problems in the future, such as the following:

• Excessive dependence on agencies: Without internal knowledge, one may become unable to accurately evaluate or judge the proposals and report contents from the agency.

• Difficulties in future in-house operations: When the business grows and you decide to manage advertising operations in-house in the future, you may be forced to start from scratch.

• Discrepancy in business understanding: While the agency is an advertising professional, understanding the nuances of your business better than your employees is challenging. If a prolonged "outsourcing" situation continues, the agency's proposals may begin to deviate from real-world experiences, potentially leading to stalled results.

[Common Pitfalls and Countermeasures] The key to avoiding this risk is to redefine the relationship with the agency as a "partner" rather than simply a "vendor." Here, the specific question of transitioning from a "vendor" to a "partner" arises. Rather than fully outsourcing, be mindful of the following actions.

• Actively participate in regular meetings: Don't just listen to the report of results; deeply question the "why" behind the initiatives.

• Actively share your company information: Not just simple product information, but sharing the core of the business about "what value we want to provide to which customers" is the first step towards true partnership. Actively share new product information, customer feedback, market trends, etc.

This kind of proactive engagement changes the relationship with the agency from mere outsourcing to a "learning opportunity," leading to the accumulation of valuable know-how in-house.

4. The discount trap: Choosing based solely on low fees can actually hinder results.

In order to achieve results within a limited budget, discounts may appear attractive. However, prioritizing discount rates when selecting an agency should absolutely be avoided.

Recently, many advertising agencies have tended to prioritize profits over sales. As a result, even for large budget projects, excessive requests for discounts lead to significant risks. A steep discount on fees means that the account will become a "low-profit project." Consequently, account managers may be forced to take on many projects, physically reducing the time allocated for your account.

Even for large budget projects, if discounts reduce profits, it may become difficult to place skilled sales and operations staff in the long term.

In other words, seeking only low fees will ultimately lower the quality of resources (talented personnel and time) allocated to your project, potentially steering you away from results. True partners discuss value and ROI, not discounts.

5. Compliance blind spots: Risks of advertising regulation that cannot be excused by ignorance.

Equally as important as optimization of performance, or even more so, is compliance with laws and regulations. Many companies tend to overlook this, but the risk of brand damage caused by errors in advertising representations is immeasurable, and the legal responsibility ultimately falls on you, the "advertiser."

Especially in highly regulated industries such as health foods, cosmetics, and medical services, the agency's compliance system directly connects to your risk management. This is not just a trap but an essential due diligence item to verify before signing a contract.

Before signing the contract, make sure to ask, "Can you tell me in detail about your compliance check system?"

If the response is vague or if they try to pass off with a baseless answer like "It's fine," this is a dangerous sign (red flag). For example, strict regulations governed by the Medical Law restrict expressions like the following on medical institutions' websites.

• Prohibition of personal testimonials: Including subjective testimonials from patients regarding treatment content or treatment effects.

• Restrictions on before and after photos: Publishing photos without a detailed explanation of treatment content, costs, risks, etc.

• Prohibition of comparative advertisements: Comparing with other institutions without objective basis, such as "one of Japan's leading achievements."

• Prohibition of false or exaggerated advertising: Including information lacking scientific basis or expressions that significantly emphasize the facts.

These legal regulations are frequently revised, so it is essential to always be aware of the latest information and have a system to check advertising representations. Confirming whether an agency has a reliable compliance system is a selection criterion that should not be taken lightly to protect your brand.

Conclusion: To build an optimal partnership.

Avoiding the five "traps" discussed so far means that selecting an advertising agency is not just about searching for an outsourcing partner but is a process of building a "strategic partnership" that drives business growth together.

Understanding the real value of fees, selecting the type of agency that aligns with your company's objectives, building a long-term relationship without fully outsourcing, and solidifying the foundation of compliance. All these aspects will be the key to succeeding in web advertising.

As we have seen up to this point, ideal advertising operations involve utilizing data while accumulating knowledge in-house and building a self-sustaining cycle that maximizes ROI. However, achieving this requires substantial resources and expertise. So how can we approach this ideal?

For companies that wish to execute these strategic partnerships at an even higher level and accelerate data-driven decision-making, the AI-powered marketing and advertising optimization platform Cascade will assist you in maximizing the ROI of your campaigns. You can accumulate know-how in-house at a price significantly lower than that of agencies.

If you are interested, please be sure to check the details.