Businesses pour millions of dollars into paid ads through their ads agency. Yet, upwards of 50% of digital ad spend is wasted due to poor targeting, bad keywords, and unoptimized accounts (Forrester).
What if HALF your ad spend is disappearing because of avoidable mistakes your ads agency is making?
Today, we’ll expose the biggest mistakes ad agencies make, how they’re costing you millions in potential revenue, and (most importantly) how to take control of your paid ads strategy.
The Importance of Running Paid Ads (and Running Them Right)
Unlike organic marketing, Google ads, Meta ads, LinkedIn ads, and other paid ads platforms give you more control over who sees your message, when they see it, and how they engage with it.
Paid traffic also allows you to test new products, ideas, and marketing campaigns. This is where many businesses go wrong. They assume their ads agency or PPC marketing company knows everything only to find out they didn’t have the campaign set up properly.
In our 12+ years as a digital agency, we’ve worked with hundreds of businesses. Many use no paid traffic, some manage their own ads, and others rely on an ads agency.
We have also run our own pilot ad campaigns to test our hypothesis of what does and doesn’t work. Time and time again our campaigns have outperformed dedicated ad agencies. Why? For the exact reasons we list below and the willingness to make the adjustments the other agencies are not willing to implement.
We’ll expose the biggest and most common mistakes.
The Biggest Mistakes Ad Agencies Make (And How It’s Costing You Money)
Poor Targeting & Lack of Strategy
One of the most expensive mistakes an ads agency can make is poor targeting and a lack of clear strategy. It doesn’t matter how much money you’re spending if your ads aren’t reaching the right people, at the right time, with the right message. You’re throwing cash down the drain.
Here’s where many get it wrong:
Targeting errors
Many agencies get targeting wrong, wasting ad spend on irrelevant locations and demographics.
We’ve seen agencies run ads in states where a business doesn’t even operate, instead of starting local and expanding strategically as leads qualify. It’s not just locations though.
Targeting the wrong audience altogether is just as costly. If your ideal customer isn’t seeing your ads, you’re burning money on wasted clicks.
Irrelevant creative & audience mismatches
An ad is only effective if it matches the audience’s intent and timing. Many agencies run generic, irrelevant, or outdated ads. One agency ran a brand awareness ad for a construction company with an image of Gemstone Christmas lights on a house in February. Completely off-target.
Failure to adapt when business goals shift
As your business grows, your goals change. Offers evolve, audiences shift, and messaging needs to be updated. But too many agencies follow a set-it-and-forget-it model, failing to adjust campaigns when needed. If you’re hiring an ads agency they should constantly be split testing and trying out new ad groups and pausing underperforming keywords and ads.
🚨Pro Tip: To determine a winning A/B test, ads should run until they reach statistical significance. This is typically 1,000+ impressions or a clear CTR (click through rate) and conversion rate difference. Underperforming ad groups should be paused if CTR is low, CPC (cost per click) is too high, or conversions remain low after sufficient data. Keywords that fail to convert after multiple clicks should be removed to prevent wasted spend.
If your ads agency isn’t prioritizing strategy, targeting, and adaptability, they’re holding your business back from growth.
Next, we’ll cover another major reason ad budgets disappear: agencies that fail to track and analyze performance.
Broken Tracking & Analytics Failures
Even if an ads agency gets targeting right, it means nothing if they can’t track results properly. Without accurate data, businesses have no way of knowing which ads are profitable and which are wasting money.
Here’s where agencies fail when it comes to tracking and analytics:
No proper UTM tracking
UTM parameters are essential for tracking ad performance, yet many agencies don’t set them up correctly, or at all. This means there’s no way to measure which campaigns, ads, or traffic sources are actually driving conversions.
Mixing traffic sources
We’ve seen agencies lump all paid traffic together, making it impossible to tell whether Google, Meta, or premium streaming platform ads are performing better. If one source is converting at 5% and another at 1%, your business NEEDS to know that data to adjust spending.
Not using separate domains or URLs
Some agencies send all traffic to the same generic page, rather than creating tailored landing pages for each ad campaign. The result? Lower conversion rates, lost insights, and wasted ad spend.
If your ads agency isn’t properly tracking performance, you’re flying blind and wasting thousands (or even millions) on ineffective campaigns.
Next, we’ll look at another critical agency failure: lack of communication and transparency.
No Communication & Lack of Transparency
A great ads agency should feel like an extension of your team, keeping you informed, involved, and confident in how your ad budget is being spent. But too often, agencies go silent, leaving businesses completely in the dark.
Here’s where communication completely breaks down:
- Agencies that “go dark”
You sign the contract, hand over your budget, and… crickets. No strategy updates, no insights into what’s working, and no transparency about what’s happening behind the scenes, yet your ad spend is getting spent. - No Clear Reports on Ad Performance
A good agency should provide detailed reports on key metrics that PROVE ROI, click-through rates, conversions, cost per acquisition/sale, cost per lead. Instead, many agencies send vague, surface-level reports that don’t actually tell you if your ads are profitable. - Making Major Decisions Without You
Some agencies change bids, adjust budgets, or shift targeting without consulting the business. The result? Money wasted on bad decisions you never approved.
If your ads agency isn’t keeping you in the loop, it’s time to rethink the partnership. A lack of communication leads to missed opportunities and wasted ad spend.
Next, we’ll cover another massive issue: agencies that ignore the technical side of running paid ads.
Ignoring the Technical Side of Paid Ads
Running profitable paid ads requires technical know-how and proper implementation. With over 86,000 ad agencies in business, the lack of expertise is becoming too common.
Here’s where agencies fail on the technical side:
- No Proper Pixel & Conversion Tracking
If tracking pixels or Google tags aren’t installed correctly, your ads won’t optimize for real conversions. This means you could be spending money on the wrong audience.
- Sending Traffic Directly to Checkout Pages
Instead of warming up leads with a landing page that educates and builds trust, some agencies route cold traffic straight to checkout (or worse… your home page). This leads to high bounce rates and low conversions.
- Ignoring Automation & Retargeting Strategies
Good ads should nurture visitors through automated sequences and smart retargeting. Retargeting is the CHEAPEST way to get more revenue because you only pay when the lead converts. Many agencies fail to set up retargeting, exclude past buyers, or leverage automation to increase sales.
Paid ads demand technical precision. If your ads agency isn’t handling the backend setup properly, you’re losing money before the campaign even starts.
Next, we’ll expose another costly mistake: short-term thinking and the lack of a long-term strategy.
Short-Term Thinking: Focusing Only on Immediate Conversions
Most ad agencies only care about short-term wins. They focus on getting quick clicks and immediate conversions, without thinking about long-term growth, customer retention, or maximizing lifetime value (CLV).
Here’s where this short-term mindset hurts your business:
- No Long-Term Retargeting Strategy
Instead of nurturing leads over time, agencies burn through cold audiences and fail to retarget high-intent visitors who didn’t convert the first time. - Ignoring Customer Lifetime Value (CLV)
A customer’s first purchase is just the beginning. Many agencies only track front-end conversions, rather than optimizing for repeat purchases and long-term revenue growth. - No Funnel Approach
If you’re looking to maximize sales, it requires creating a full funnel that guides potential customers from awareness to purchase and beyond. Agencies that skip lead nurturing and follow-ups leave huge amounts of money on the table.
If your ads agency isn’t thinking beyond the initial sale, they’re limiting your business’s growth potential.
Now that we’ve exposed the biggest mistakes ad agencies make, let’s talk about how to spot red flags and take control of your paid ad strategy.
How to Spot If Your Ads Agency is Failing You
If you’re spending thousands on paid ads but aren’t sure if they’re actually working, your agency might be failing you. Here are a few red flags to watch for:
- Vague or Confusing Reports
If your agency can’t clearly show which ads are converting, where your budget is going, and your cost per acquisition, that’s a problem. - No A/B Testing or Optimization
Are they testing different creatives, audiences, and landing pages? If not, they’re leaving money on the table. - You Can’t Measure ROI
If you don’t know how much revenue your ads are generating, your agency isn’t tracking performance properly. - They Don’t Adapt or Adjust Strategy
If your business goals change but your ad campaigns stay the same, your agency isn’t paying attention. - They Won’t Give You Access to Your Ads Account
ALWAYS make sure you have full access to your ad account. If your agency refuses, that’s a huge red flag. They might be hiding conversion tracking issues, wasted spend, or poor management. If you see problems and they don’t fix them, fire them.
Questions to Ask Your Agency:
- How are you tracking conversions and ROI?
- What’s our cost per lead, and how does it compare across platforms?
- What testing strategies are in place to improve performance?
- What is our ROAS (Return on Adspend)?
If they can’t give clear answers, it’s time to take control of your ads.
How to Actually Make Paid Ads Profitable
No matter how good your ads agency is, running ads alone isn’t enough. You need a full marketing funnel to maximize the lifetime value of your customers.
- Build a Complete Funnel
Don’t just send traffic to a product page. Use lead magnets, email sequences, and upsells to build trust and credibility, nurture leads and increase revenue. - Use Retargeting & Follow-Ups
Most visitors won’t buy on the first click. Retarget them with ads and follow up via email or SMS to bring them back. - Track Every Stage of the Funnel
If conversions are low, is it the ad, the targeting, the landing page, or the offer? Identify weak points and optimize. - A/B Test Everything
Run split tests on ad creatives, CTAs, landing pages, and offers to constantly improve performance.
If your ads agency isn’t tracking, optimizing, or driving real conversions, they’re failing you. Every dollar wasted on poor targeting, bad tracking, or a weak strategy is your money being lit on fire.
Take control. Know your numbers, ask the right questions, and demand transparency. Paid ads should be an investment, not an expense.
Want to fix your ad strategy and see real ROI?
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