How to select a Digital Agency?

I have been around in digital marketing for around 10 years and have worked both on the client side (first few years) and then on the agency side. I have seen a lot of different approaches by clients for evaluating digital agencies. Based on this experience, I have my own two bits to offer on how to evaluate an agency.

Understands your business model and operating environment

The digital agency should have done its homework about you. It should understand how your business makes money and what are the challenges it is facing. Understanding the basics helps them get the details right during a campaign. It should understand as well as you what the ROI metrics are going to be and how to capture them. For example, the ROI for a campaign might be based on increased awareness for a particular product. The metric could be CPM or 'influenced revenue'. Similarly, for an SEO campaign, the agency should be prepared to report not only ranks, but SEO generated revenue and traffic for an ROI measure. What is important is that the metric is definite, understood and accepted as a measure of performance.

Online marketing experience and knowledge

While this field is all of ten years old, there has been a lot of change here. However, common sense rules work here as well as it does in other channels. For example, a campaign should ideally make more money than it costs. What I am trying to say is that experience counts. So does variety. Today, there are numerous social media agencies which have great ideas and insights into the Facebook customer. However, an online campaign is all about making different platforms work with each other for the business. The agency has to have multi-discipline prowess across online marketing.

Work ethic and culture

An open and collaborative approach is best for problem-solving – which is the main skill required during campaign execution. Transparency also implies that costs are shared and that there are no surprises or hidden kickbacks. Every little project will have its unique set of problems. Having an agency which is open and transparent will help.

Agency contracts and pricing

The lock-in and notice period for an agency contract should be proportional to the ongoing investment it is making. It should be upfront about the deliverables and the breakup of the final price. Agencies which seem too eager might have their reasons for being so. Dig deeper.

I would love to hear your thoughts and experiences with agency selection.