Solved: B2B Ad Agency ROI? (Data Inside)

Hi there,

Thanks for reaching out. It's a question I hear a lot, and to be honest, it's the right question to be asking. Far too many businesses treat hiring an agency like a box-ticking exercise without really questioning the fundamentals. I'm happy to give you some initial thoughts and guidance on how to think about this. The answer isnt just about whether an agency is 'worth it', it's about whether your entire approach to growth is built to succeed in the first place.

Most B2B advertising fails not because the agency is bad or the ad platform is broken, but because the strategy behind it is fundamentally flawed from the start. You're right to be struggling to quantify the ROI, because without the right framework, you're just guessing. Let's fix that.

We'll need to look at your ICP... because it's probably a nightmare, not a demographic

Right, let's be brutally honest. If I asked you to describe your Ideal Customer Profile (ICP), you'd probably give me something sterile and demographic-based. Something like, "We sell to companies in the finance sector with 50-200 employees, and our main point of contact is the Head of IT."

This tells you almost nothing of any real value. It leads to generic, bland advertising that talks *at* a job title, not *to* a person with a real, urgent problem. You end up burning cash trying to get the attention of thousands of people who couldn't care less about what you do. It's the single biggest reason B2B campaigns fail.

To stop incinerating your marketing budget, you have to redefine your customer not by who they are, but by the specific, urgent, expensive, career-threatening nightmare they are living through. Your Head of IT isn't just a job title; he's a leader who lies awake at night terrified of a catastrophic data breach that will make the front page and cost him his job. Your Head of Engineering client isn't just a manager; she's constantly stressed that her best developers are about to quit out of sheer frustration with a clunky, broken development workflow that kills their productivity and morale.

For a legal tech SaaS we've seen, the nightmare isn't 'needing better document management'; it's 'a senior partner missing a critical court filing deadline because they couldn't find the right document, exposing the entire firm to a multi-million-pound malpractice suit.' See the difference? One is a feature list. The other is a visceral, emotional pain point. Your ICP isn't a person; it's a problem state.

Once you've properly isolated that nightmare, everything else starts to fall into place. Your entire targeting and messaging strategy flows from this understanding. You need to become an expert in their world. Where do they go to find solutions? What niche podcasts do they actually listen to on their commute, like 'Acquired' or 'This Week in Startups'? What industry newsletters do they genuinely open and read every morning, like 'Stratechery' or 'The Hustle'? What specific SaaS tools are already on their company credit card – HubSpot, Salesforce, Slack, Asana? Are they members of the 'SaaS Growth Hacks' Facebook group? Do they follow influential figures like Jason Lemkin or Scott Galloway on LinkedIn or Twitter?

This level of intelligence isn't just 'data'; it's the entire blueprint for your advertising strategy. This is the foundational work. If you haven't done this, you have no business spending a single pound on ads. An agency that just asks for your demographics and starts running campaigns is just taking your money to fuel a bonfire.

I'd say you need to calculate your Customer Lifetime Value (LTV)... or you're flying blind

Your core question is about ROI. "Will the benefits outweigh the cost?" The real question you should be asking is not "How low can my Cost Per Lead go?" but rather "How high a Cost Per Lead can I afford to pay to acquire a truly great customer?" The answer to that question is found in its direct counterpart: Customer Lifetime Value (LTV).

Without knowing this number, you are making decisions based on gut feel and fear, which is a terrible way to run a business. Let's actually calculate it. It's simpler than you might think, and it will completely change how you view your marketing spend. You just need three metrics from your business:

• -> Average Revenue Per Account (ARPA): What do you make, on average, from a single customer each month? Let's use a hypothetical example and say it's £500.
• -> Gross Margin %: What's your actual profit margin on that revenue after accounting for the cost of servicing that customer? Let's say it's a healthy 80%.
• -> Monthly Churn Rate: What percentage of your customers do you lose each month, on average? This can be a painful number to look at, but you need to know it. Let's say it's 4%.

Now, we just plug these numbers into the formula. I've laid it out in a table for clarity.

There you have it. In this example, every single customer you acquire is worth £10,000 in gross margin to your business over their lifetime. This is the truth. This is your North Star metric.

Now, how does this help you quantify your ad spend? A healthy, sustainable business model often aims for a 3:1 LTV to Customer Acquisition Cost (CAC) ratio. This means for every £3 of lifetime value you generate, you can spend £1 to acquire that customer.

With a £10,000 LTV, you can therefore afford to spend up to £3,333 to acquire a single new customer and still have a very profitable business. Let's take it one step further. If your sales process typically converts 1 in 10 qualified leads into a paying customer (a 10% conversion rate), then you can afford to pay up to £333 per qualified lead.

Suddenly, that £250 lead from targeting a specific CTO on LinkedIn doesn't seem so expensive, does it? It looks like an absolute bargain. This is the mathemetics that unlocks intelligent, aggressive growth. It frees you from the tyranny of chasing cheap, low-quality leads and allows you to confidently invest in acquiring the right customers. Any agency that doesn't start the conversation here is just playing a guessing game with your money.

You probably should delete the "Request a Demo" button... it's killing your business

Now we arrive at the most common, and most lethal, failure point in all of B2B advertising: the offer. What are you actually asking people to do when they click your ad?

For 90% of B2B companies, the answer is "Request a Demo." The "Request a Demo" button is quite possibly the most arrogant, self-serving Call to Action ever conceived by marketers. It makes a huge presumption: that your prospect, a busy, stressed-out C-level decision maker, has nothing better to do with their time than book a 45-minute slot in their calendar to be sold to by your junior sales rep. It is high-friction, low-value, and instantly positions you as just another commoditised vendor desperate for a meeting.

Your offer has one job and one job only: to deliver a moment of undeniable value. An "aha!" moment that is so powerful it makes the prospect sell themselves on your solution before you've even had a proper conversation. The offer must solve a small, real problem for free to earn you the right to solve the whole, expensive problem later.

If you're a SaaS founder, this is your ultimate unfair advantage. The gold standard offer is a genuinely free trial (with no credit card details required) or a generous freemium plan. Let them actually *use* the product. Let them experience the transformation for themselfs. Let them see their nightmare recede. When the product itself proves its own value, the sale becomes a simple formality. You're no longer generating Marketing Qualified Leads (MQLs) for a sales team to chase and annoy; you're creating Product Qualified Leads (PQLs) who are already convinced and are now asking you how they can pay.

If you're not a SaaS company, you are not exempt from this rule. You must find a way to bottle your expertise into a tool, a peice of content, or an asset that provides instant, tangible value.

-> For a marketing agency: This could be a free, automated SEO audit that instantly shows them their top 3 missed keyword opportunities and how much traffic they're losing to competitors.
-> For a data analytics platform: This could be a free 'Data Health Check' that connects to their database and flags the top 5 critical issues affecting their data integrity.
-> For a corporate training company: This could be a free 15-minute interactive video module on 'How to Handle Difficult Conversations with Underperforming Employees' for new managers.

For us, as a B2B advertising consultancy, our version of this is a completely free, no-obligation 20-minute strategy session where we get on a call, open up a client's failing ad accounts, and show them exactly what's wrong and how we'd fix it. The value is immediate. They leave the call with actionable advice, wether they hire us or not.

You must give value first. It's not negotiable in today's market.

You'll need a message they can't ignore

Once you know their nightmare, you have your LTV numbers, and you have a value-first offer, you can finally write an ad that actually works. The copy needs to speak directly to their pain, agitate it, and then present your offer as the clear, obvious solution. We often use simple, proven frameworks.

For a high-touch service business, you can deploy the classic Problem-Agitate-Solve (PAS) framework. You don't sell "fractional CFO services"; you sell a good night's sleep to a stressed-out founder. The ad would sound something like this:

"Are your monthly cash flow projections just a wild shot in the dark? Worried you're one bad month away from a payroll crisis while you watch your competitors confidently raising their next round of funding? Stop guessing. Get expert financial strategy and a clear roadmap for a fraction of a full-time hire. We build dashboards that turn uncertainty into predictable, profitable growth."

For a B2B SaaS product, the Before-After-Bridge framework is incredibly effective. You don't sell a "FinOps platform"; you sell the feeling of relief and control. The ad would say:

"Before: Your latest AWS bill just landed. It’s 30% higher than last month, your engineers have no idea why, and the CFO is on your back. Another fire to put out. After: Imagine opening your cloud bill and actually smiling. You see exactly where every single dollar is going, and costly waste is being automatically eliminated. Bridge: Our platform is the bridge that gets you from chaos to control. Start a free trial and find your first £1,000 in savings in the next 10 minutes."

This is how you cut through the noise. You're not talking about your company or your features. You're talking about their life, their problems, and their desired future state. The agency you partner with needs to demonstrate this level of customer empathy and copywriting skill. If their proposed ads just list your features and a "learn more" link, you are paying them to fail.

Here's a summary of the strategic shift I'm outlining. It's the difference between the typical, wasteful approach and an expert, profitable one.

So, will an agency outweigh the cost?

After all this, we can return to your original question. An agency is worth the cost *if* they operate with this level of strategic rigour. They are not just button-pushers who know their way around an ad platform's interface. They are strategic partners who force you to answer these tough questions and build a growth engine based on mathematics and customer psychology, not guesswork.

Their value isn't just in the time you save. It's in the costly mistakes they help you avoid. It's in the speed at which they can test these strategies and find what works. We've seen these principles in action time and again. We've taken B2B SaaS clients from a £100 Cost Per Acquisition down to just £7. We've generated leads for B2B decision-makers on LinkedIn for as little as $22 a pop. We've helped another B2B software client get 4,622 registrations at just $2.38 each. This is what's possible when the underlying strategy is sound.

The cost of a good agency is an investment in expertise that accelerates your path to a predictable, scalable, and profitable customer acquisition machine. The cost of a bad agency, or trying to do it yourself without this framework, is a near-certainty of wasted time, wasted money, and immense frustration.

The first step isn't to sign a contract. It's to have a conversation that sounds a lot like the one we've just had in this letter. If you'd like to have that conversation about your specific business, I'd be happy to offer you a free, 20-minute strategy session where we can dive into your situation and give you some clear, actionable advice on what your next steps should be. No obligation, no sales pitch, just a genuine attempt to help.

I hope this has given you a much clearer framework for making your decision.

Regards,

Team @ Lukas Holschuh