The Agency Audit Checklist: 20 Questions to Ask

We wrote The Agency Incentive Problem to explain why your agency can't tell you the truth - not won't, can't. The retainer model pays them to manage what's inside your ad accounts, and the numbers that decide whether you can scale live outside them. So both sides settle on platform ROAS, because that's the only number the contract can defend and the tool can produce.

This page turns that argument into something you can use on your next agency call. 20 questions, grouped into the four places the problem shows up: what they report, what they're incentivized to do, what they actually own in your growth, and how they behave when things break.

One calibration point before you start: in the accounts we've audited, Google Ads typically overstates its contribution by 80-90% and Meta typically understates by 20-80%. If your agency's reporting starts and ends with platform dashboards, several of these questions will go badly - and that's the point.

"We spent an absolute ton of money but the overall profitability of e-commerce absolutely tanked."

Ryan Vaughan

Globe-Trotter · on their previous setup

The 20 questions

Ask. Listen. Check the box if it sounds like the red flag.

Book 30 minutes with your agency, or just pull up your last three monthly reports - for most of these, you already know the answer.

How to score it: check the box when the answer you get - or the answer you already know - sounds like the red flag. One red flag is a conversation. A pattern is a diagnosis. And to be fair to the humans involved: most of what this surfaces is not bad people. It's the model working exactly as designed.

Part 1 of 4

Reporting & numbers

Whether the numbers you get describe your business - or the inside of an ad account.

1. Do they report CAC on new customers only, or blended? Good answer: both numbers, split without being asked - because blended CAC hides what it costs to acquire a stranger. Red flag: one CAC number, and they can't tell you which customers are in it.
2. Where do the numbers in your monthly report actually come from? Good answer: your store's order data and your P&L, reconciled against the platforms - with the gaps explained. Red flag: screenshots of Ads Manager. The platform grades its own homework and the report passes it along.
3. Does your report show contribution margin after ad spend - or stop at ROAS and revenue? Good answer: you can see what the ads left behind after COGS, fulfillment, fees, and spend. Red flag: ROAS and revenue only - you do the profit math alone at the end of the month.
4. Can they tell you last month's split between new-customer and returning revenue? Good answer: the exact split, plus whether it's drifting - growth funded by repeat buyers isn't acquisition. Red flag: a pause, then "overall performance is strong."
5. When their report and your bank account disagree, what happens? Good answer: your P&L is treated as ground truth and the gap gets investigated until it's explained. Red flag: the dashboard gets defended, and the bank account is dismissed as "attribution being hard."

Part 2 of 4

Incentives & pricing

Not what they charge - what the agreement measures, what you own, and which direction their advice can point.

6. Which number does your agreement define success on? Good answer: a number you can verify in your own books - profit, new-customer CAC against a target, contribution margin. Red flag: platform ROAS or "account growth" - numbers that live inside tools the platforms control.
7. Who owns the ad account, the pixel, and the creative - and what do you keep if you leave tomorrow? Good answer: everything is yours - account, tracking, creative files, historical data. Leaving costs you nothing but the relationship. Red flag: any of it sits in their Business Manager "for convenience." Leaving means starting over.
8. Have they ever recommended you cut or pause ad spend? Good answer: yes - and they can name the month and the reason. Red flag: never. In the entire relationship, the answer has always been more budget.
9. When the problem lives outside the ad account - offer, landing page, retention - do they say so? Good answer: they've flagged problems they don't get paid to fix, by name, in writing. Red flag: everything gets solved with a new campaign structure, because that's the only lever they hold.
10. When they propose a budget increase, which number is it based on? Good answer: what the incremental spend returns - contribution margin or payback on the next dollar, not the account average. Red flag: "ROAS is above target, so there's room" - the average hides that the next dollar performs worse than the last.

Part 3 of 4

Strategy & ownership

Whether there's a diagnosis behind the activity - and whether you'd keep anything if they left.

11. Can they name your single biggest growth constraint right now? Good answer: a specific call - offer, creative, conversion, retention, or margin - with the number that points to it. Red flag: "we need to test more creative" - for the third quarter in a row.
12. What changed in their plan after your last flat month? Good answer: a diagnosis and a different plan you can compare against the old one. Red flag: nothing. The flat month was seasonality, the algorithm, or iOS - and the plan rolled forward untouched.
13. If the agency disappeared tomorrow, could your team run the tracking and dashboards they built? Good answer: everything lives in your accounts, and your team could operate it by Friday. Red flag: the reporting exists as their slide deck and their logins.
14. Do they know your gross margin and what a first order is worth after costs? Good answer: they asked for COGS and fees in the first month, and their targets are built on your unit economics. Red flag: they've never asked what a sale earns you - which means every target they set is a guess.
15. What's the plan beyond "more of what's working"? Good answer: a sequence - what gets fixed next, why, and which number will prove it worked. Red flag: scaling means duplicating campaigns and raising budgets until it stops working.

Part 4 of 4

Communication & accountability

How they behave when things break - the part no proposal ever shows you.

16. When performance breaks, who tells whom? Good answer: they flag the bad week before you see it - with a cause and a fix already moving. Red flag: you find the drop in Shopify and open the conversation yourself.
17. Can the person actually running your account explain the strategy? Good answer: the operator on your account can defend every decision in it. Red flag: strategy lives with the person who sold you - the one you haven't seen since the contract.
18. Ask what didn't work last month. What comes back? Good answer: a straight list of failed tests and what each one taught them. Red flag: a highlight reel. Somehow, nothing has ever failed.
19. Do action items from your calls get done without you chasing? Good answer: promised, then delivered or flagged - in writing, before the next call. Red flag: you keep a private list of things you've now asked for twice.
20. Do they put recommendations in writing before the results are in? Good answer: a written call with an expected outcome you can check later - right or wrong, on the record. Red flag: the story arrives after the numbers do, and it always fits.

The verdict

Now count your red flags.

An honest read on what your count means - no email gate, no "book a call to see your score."

Red flags checked: 0 of 20

The count stays on this page - nothing you check is stored or sent anywhere.

Take it to the next agency call.

Prefer paper? Download the print version - the same 20 questions on A4, ready for your next monthly review.

Download the Print Version (PDF)

For brands doing $1M+/yr and spending $30K+/month on ads

You could ask your agency 20 questions. Or ask us for the answers.

The checklist tells you whether your agency's answers hold up. A free 30-minute Strategy Call goes a level deeper: we sanity-check your real numbers and name the most likely constraint holding your scale - live, from your data, not the platform's.

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The Agency Audit Checklist.