TLDR;
- Most London ad agencies are sales-first, results-second. Ignore the fancy Shoreditch office and focus on raw, verifiable evidence of their expertise.
- Case studies are your best friend, but only if you know how to read them. Look for niche-relevance and detailed strategy walkthroughs, not just flashy ROAS numbers.
- The most important metric isn't Cost Per Lead (CPL), it's your Lifetime Value (LTV) to Customer Acquisition Cost (CAC) ratio. Use our interactive LTV calculator in this guide to figure out what you can actually afford to spend.
- Your offer is everything. A brilliant agency can't sell a bad offer. Before you spend a single pound on ads, you need an offer that solves a specific, urgent pain for a defined audience.
- Use the Vetting Funnel diagram and the Agency Red Flag Detector inside to systematically weed out the talkers from the doers and avoid costly mistakes.
I get it. You're a founder in London, you're trying to grow, and every other person you meet seems to run a "performance marketing agency". They all have slick pitch decks, talk a good game about ROAS and KPIs, and probably have a nicer office than you do. But when you ask for specifics, it all gets a bit vague. It’s a proper minefield, and you're right to be cautious, because picking the wrong agency doesn't just waste your money, it wastes your most valuable asset: time.
The truth is, most agencies are built to sign clients, not to grow them. They get you excited with big promises, lock you into a 12-month contract, and then hand your account over to a junior who's juggling 20 other clients. Your business becomes just another line on their spreadsheet. To avoid that fate, you need to stop thinking like a client being sold to, and start thinking like an investor doing due diligence. Your job is to cut through the noise and find the handful of operators who are genuinely obsessed with getting results.
So, how do you spot the real deal in a sea of suits?
First off, you need to completely change your evaluation criteria. Forget the size of their team, the awards on their shelf, or their office postcode. None of that correlates with performance. I've seen brilliant one-man bands run circles around huge agencies in Canary Wharf. What you need is irrefutable proof they can solve problems like yours. And that proof comes in two forms: deep-dive case studies and a proper grilling on an intro call.
A good case study isn't a glossy PDF with a big number on the front. It's a detailed walkthrough. I remember one campaign for a B2B software client where we generated 4,622 registrations at just $2.38 each. A proper case study would explain how. It would detail the audience targeting we used on Meta Ads, the specific ad creative that worked, the landing page changes we recommended, and the split tests we ran to get the cost down. It should read like a strategic plan, not a sales brochure.
When you're looking at an agency's case studies, ask yourself:
- -> Have they worked with businesses similar to mine? Not just in the same industry, but with a similar business model, ticket price, and sales cycle. Getting leads for a £50/month SaaS is a completely different ball game to selling £20k industrial equipment.
- -> Are the results believable? Anyone can get a "10x ROAS" by targeting low-hanging fruit for one week. Look for sustained performance over several months. For B2B, look at Cost Per Lead (CPL) and, more importantly, Cost Per Qualified Lead.
- -> Do they explain the 'why'? Why did they choose LinkedIn Ads over Google? Why did that particular ad creative resonate? If they can't articulate their strategic reasoning, they were probably just lucky.
If an agency can’t show you at least a couple of in-depth case studies that are relevant to your business, it's a huge red flag. It likely means they dont have the experience you need. After you've checked out their case studies and reviews, you need to get them on a call. And this isn't a sales call; it's an interview. You are interviewing them for a critical role in your company. If you're a founder in the UK, understanding how to properly vet ad agencies is probably one of the most important skills you can learn.
Step 1: Initial Research
Scour their website for in-depth, relevant case studies. Ignore vanity metrics. Look for strategy.
Step 2: The 'Expertise' Call
Get them on a call. Is it a salesperson or a strategist? Ask tough, specific questions about your business.
Step 3: The Proposal Review
Does their proposal feel custom or like a template? Is it focused on activities or business outcomes?
What questions expose a weak agency?
When you get them on that initial call, your goal is to find out if you’re talking to a salesperson or a genuine strategist. A salesperson will talk about their process. A strategist will talk about your business. They'll ask sharp questions about your customers, your margins, your sales cycle, and your LTV. Tbh if they don't ask these things, they cant possibly develop a sound strategy for you.
Here are some questions you should ask them:
"Based on what you know about my business, what would your first 90 days look like? What would you prioritise?"
A bad answer is generic: "We'll do an audit, set up campaigns, and optimise." A good answer is specific: "Okay, you're a London-based fintech targeting Series A founders. In month one, we'd ignore Google Search because the intent isn't there. Instead, we'd build highly targeted LinkedIn campaigns aimed at 'Founders' and 'CXOs' in our target company list, driving them to a case study landing page. Month two, we'd introduce retargeting on Meta with creative that tackles common objections. Month three, we scale the winning campaigns." See the difference? One is a to-do list, the other is a strategy.
"What's the biggest mistake you see companies in my industry making with their paid ads?"
This tests their industry knowledge. A top-tier expert who's worked in the UK tech scene should be able to instantly tell you that most SaaS companies bid on overly broad keywords, have terrible landing page copy, and ask for a demo way too early in the relationship. They'll have an opinion, because they've seen what works and what doesn't, time and time again. Finding an expert who can pinpoint these issues is half the battle; that's why we've put together a guide for London B2B founders on selecting the right agency.
"How do you handle reporting, and what metrics do you consider most important?"
If they lead with vanity metrics like impressions, clicks, or CTR, run a mile. These mean nothing to your bottom line. You want to hear them talk about business metrics: Cost Per Qualified Lead, Customer Acquisition Cost (CAC), and Return On Ad Spend (ROAS). They should be obsessed with connecting ad spend to actual revenue. They should also be transparent. You should have full ownership and access to your ad accounts, always.
The Agency Red Flag Detector
How much should I even be paying for this?
This is the million-dollar question, isn't it? In London, you can find agencies charging anything from £500 a month to £10,000+ a month. The price often has more to do with their overheads than the value they provide. Here's a realistic breakdown of costs:
Ad Spend: This is the money that goes directly to Google, Meta, etc. For a new business in a competitive London market, you should be prepared to spend at least £1,500-£2,000 per month to get enough data to make decisions. Anything less and you're just trickling money away without learning anything.
Management Fee: This is what you pay the agency. It typically comes in three flavours:
- Flat Retainer: Common in London. You pay a fixed fee each month, say £1,500 - £3,000. It's predictable, but can lack incentive for the agency to scale your spend.
- Percentage of Ad Spend: Usually 10-20%. This aligns their incentives with yours to scale, but make sure they're scaling profitably and not just for the sake of increasing their fee.
- Performance-Based: Less common, but the holy grail if you can find it. They might take a lower retainer plus a percentage of revenue generated, or a fee per qualified lead. This is the ultimate sign of confidence in their own abilities.
Be very wary of cheap agencies. An agency charging £500 a month cannot afford to put a senior strategist on your account. You'll get a junior exec who is following a checklist. You're not paying for expertise; you're paying for button-pushing. In paid advertising, you genuinely get what you pay for. A cheap agency will cost you far more in wasted ad spend and missed opportunities than a more expensive, expert-led one. If you want to understand the numbers better, we wrote a piece on London agency pricing and how to think about ROI.
The real question isn't what it costs, but what it's worth. A £3,000/month agency that brings you £15,000 in profitable revenue is a bargain. A £500/month agency that burns through £2,000 of ad spend with nothing to show for it is a disaster. Which brings us to the most important calculation you need to make.
The one number that matters more than anything
Stop obsessing over your Cost Per Lead (CPL). It's a useful metric, but it's not the goal. The goal is profitable growth. To understand that, you need to know your Customer Lifetime Value (LTV). How much gross margin does a new customer generate for your business over their entire relationship with you? Once you know this, you can figure out your maximum affordable Customer Acquisition Cost (CAC).
Let's run the numbers for a hypothetical London SaaS company:
- Average Revenue Per Account (ARPA): £400/month
- Gross Margin: 80% (common for software)
- Monthly Churn Rate: 5% (meaning the average customer stays for 20 months)
The calculation is: LTV = (ARPA * Gross Margin) / Churn Rate
So, LTV = (£400 * 0.8) / 0.05 = £320 / 0.05 = £6,400.
Each new customer is worth £6,400 in gross margin. A healthy LTV:CAC ratio is at least 3:1. This means you can afford to spend up to £6,400 / 3 = ~£2,133 to acquire a new customer. Now work backwards. If your sales team closes 1 in 10 qualified leads, you can afford to pay up to £213 per qualified lead. Suddenly that £100 CPL from a LinkedIn campaign doesn't look so bad, does it?
This is the maths that separates amateurs from professionals. An agency that doesn't ask about your LTV and unit economics in the first call is not an agency you should hire. They're flying blind. Use the calculator below to get a rough idea of your own LTV.
Your Final Vetting Checklist
Alright, that was a lot of information. Let's boil it down to a simple, actionable process. When you're assessing a London ad agency, this is what you need to do. Don't skip any steps. This is the difference between a smart investment and a costly mistake.
I've detailed my main recommendations for you below:
| Vetting Criteria | What to Look For (The Green Flags) | What to Avoid (The Red Flags) |
|---|---|---|
| Case Studies | Detailed, strategic walkthroughs. Similar business model to yours. Verifiable, long-term results (not just one good week). Clear explanation of the 'why'. | Vague, glossy PDFs with vanity metrics. Irrelevant industries. Unbelievable claims. No strategic insight. |
| The Initial Call | You're speaking with a senior strategist, not a junior salesperson. They ask sharp questions about your business, margins, and LTV. They offer specific, initial ideas. | A scripted sales pitch. They talk about their "process" but not your problems. They can't answer your strategic questions directly. |
| The Proposal | Customised to your business. Focuses on outcomes (e.g., qualified leads, CAC targets) not just activities (e.g., campaign setups). Clear scope and deliverables. | Looks like a template with your logo slapped on. Full of jargon. Promises guaranteed results. Long, inflexible contract terms (more than 3-6 months). |
| Pricing & Terms | Transparent pricing that reflects genuine expertise. A structure that aligns their success with yours (e.g., performance component). You retain full ownership of all ad accounts. | "Too good to be true" low prices. They want to run ads through their own account. Long-term lock-ins from day one. Vague about what the fee includes. |
Choosing an agency is one of the biggest marketing decisions you'll make. It's tough, especially when you feel like you don't know what you don't know. The process I've outlined above isn't about finding the 'cheapest' or 'biggest' agency; it's about finding a genuine partner. It’s about finding the small group of experts who will treat your budget like it’s their own and be as obsessed with your growth as you are. It’s a difficult thing to do when you’re feeling completely clueless about how to hire an agency, but it's not impossible if you follow a structured approach.
If you're a founder in London and you're at this stage, it can feel overwhelming. You're trying to build a product, manage a team, and now you have to become a paid advertising expert overnight just to hire someone. This is where getting a second opinion can be incredibly valuable.
We offer a completely free, no-obligation initial consultation where we can look at your business, your goals, and give you our honest, unfiltered opinion on what we think a realistic strategy would look like. At worst, you'll walk away with a ton of free advice that'll make you much more confident in your vetting process. At best, we might find we're a great fit to help you grow. Feel free to book a call if you'd like to chat.
