Ad agency or do it yourself

[Lunamoonbay]

In the past year I tried my online store with big ads agencies( they claim they help promoting multiple medium/ small successful ecommerce companies).

However the first one gave me a 2-3 time ROAS for 6 months and they are not be able to scale more than 4 digits( ROAS started to decrease passing certain amount of spend). The second one literally give me 1 :1 ROAS ‍ And I have to end the contract.

Any suggestions what i should do now? I have literally 3 options to choose from:
1. Do it myself - save the money I spend on maintenance fee but might take a while to learn and if I can’t find good materials to learn from this might take forever.
2. Hire a freelancer / in house ad person to do it - with 4 digits ad spending per month, this seems a waste of money for now? However my goal is to scale, so if this person can scale this would be the best option here.
3. Continue using an agency - they want you to sign a lengthy contract with them (6month -1 year) and you do not know if them suck or not until you try. And honestly I don’t know if they all suck or just me not finding the right one ?

 

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[PizzaOnTheRoof]

In the past year I tried my online store with big ads agencies( they claim they help promoting multiple medium/ small successful ecommerce companies).

However the first one gave me a 2-3 time ROAS for 6 months and they are not be able to scale more than 4 digits( ROAS started to decrease passing certain amount of spend). The second one literally give me 1 :1 ROAS ‍ And I have to end the contract.

Any suggestions what i should do now? I have literally 3 options to choose from:
1. Do it myself - save the money I spend on maintenance fee but might take a while to learn and if I can’t find good materials to learn from this might take forever.
2. Hire a freelancer / in house ad person to do it - with 4 digits ad spending per month, this seems a waste of money for now? However my goal is to scale, so if this person can scale this would be the best option here.
3. Continue using an agency - they want you to sign a lengthy contract with them (6month -1 year) and you do not know if them suck or not until you try. And honestly I don’t know if they all suck or just me not finding the right one ?

What’s wrong with a 1:1 ROAS as a baseline?

Did you give them enough time to optimize the ads and split test new ones?

Lots of stores run break even campaigns and make bank. I’d be interested to see your acquisition costs compared to LTV.

 

[Lunamoonbay]

What’s wrong with a 1:1 ROAS as a baseline?

Did you give them enough time to optimize the ads and split test new ones?

Lots of stores run break even campaigns and make bank. I’d be interested to see your acquisition costs compared to LTV.

they have been running it for 3 months, LTV: CAC roughy 2:1 with the second agency

 

[SEBASTlAN]

I would personally do it myself. It's a learning experience and can turn into a real opportunity if you discover you like doing it.

 

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[PizzaOnTheRoof]

they have been running it for 3 months, LTV: CAC roughy 2:1 with the second agency

Gotcha. I’d have to agree to just try yourself.

At least you’ll know exactly what’s going on, and have the experience once you do hire out.

 

[100k]

Perhaps the problem is your product and not their skills.

Its easy to get 10x ROI/ROAS when you're promoting a great offer and the business has a great funnel.

Do you have a funnel, what's your offer like? Do you do re-targeting, build e-mail lists?

 

[Walter.LV]

The first agency that was able to get 2x, 3x Roas seems like a great deal to me. In direct response being able to get break even on the front end (acquisition) is good. Then the back-end (lifetime value) is what gives you the real profits.

Regarding your question- it depends. Do you love building ad campaigns? Do you love buying media, analyzing data, and optimizing your campaigns? If so, do it yourself. If not, get some one (agency, freelancer) who does.

To give you some context - I worked for a digital firm (we built apps for the health market for a subscription product) with the ad policies these big networks now have, getting break even on acquisition level is great. So your business depends on selling to the same customers on the back end. If the value isn't there, it's tough to survive.

 

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[Lunamoonbay]

The first agency that was able to get 2x, 3x Roas seems like a great deal to me. In direct response being able to get break even on the front end (acquisition) is good. Then the back-end (lifetime value) is what gives you the real profits.

Regarding your question- it depends. Do you love building ad campaigns? Do you love buying media, analyzing data, and optimizing your campaigns? If so, do it yourself. If not, get some one (agency, freelancer) who does.

To give you some context - I worked for a digital firm (we built apps for the health market for a subscription product) with the ad policies these big networks now have, getting break even on acquisition level is great. So your business depends on selling to the same customers on the back end. If the value isn't there, it's tough to survive.

Thank you so much for the insight. But my campaign manager told me she was not be able to scale more than what it was. She asked me to add google ads. But my concern / question is why are not be able to scale pass certain number, does that mean my business is not suitable for Facebook ads or they are just not good enough? Or I should have added google ads? Is there really a “wall”?

 

[Walter.LV]

Thank you so much for the insight. But my campaign manager told me she was not be able to scale more than what it was. She asked me to add google ads. But my concern / question is why are not be able to scale pass certain number, does that mean my business is not suitable for Facebook ads or they are just not good enough? Or I should have added google ads? Is there really a “wall”?

Welll, without any specific details, it's hard to give you a detailed answer. What I can tell you is this - when trying to scale fb ads, ROI usually goes down a bit.

You could achieve greater scale at ROI's expense, but then you'd have to readjust KPI's and really know what your average customer lifetime value is.

If you know you're making money on the back-end (email campaigns), then this could be an option.

As regards to a "wall" - don't really think so. It comes down to how much it costs to acquire a customer (CPA) and how much one customer is worth over the lifetime (LTV). Once you know you're numbers you can make a decision - if it's scale (revenue) you're after or ROI (profits)