Industry Truths6 min read

Why 'Performance Guarantees' Are a Scam

Author

Digitopia Founder

December 05, 2024

Why 'Performance Guarantees' Are a Scam

Executive Summary

  • Guarantees incentivize agencies to bid on your own Brand Name keywords (which have high ROAS but add no value).
  • They often use "View-Through Attribution" to claim credit for sales that would have happened anyway.
  • Action: Look for "Alignment," not Guarantees. Pay based on profit growth, not vanity ROAS.

It sounds perfect: "We guarantee 3x ROAS or we work for free." But in marketing, if it sounds too good to be true, it's because they are cooking the books. No one can guarantee the stock market, and no one can guarantee the ad auction.

The "Brand Search" Trap

The easiest way to hit a fake ROAS target is to run ads targeting people who are already searching for your name.

If someone Googles "Nike Shoes," they are already going to buy. If an agency runs an ad there, they get a 20x ROAS. They show you the report, claim their fee, and you effectively paid double for a customer you already had. This is called Cannibalization.

The "View-Through" Attribution Trick

Agencies will often enable "1-Day View" attribution. This means if someone sees your ad, scrolls past, but buys 5 hours later from an email you sent, the Agency claims credit. They are taking credit for your email team's work.

The Solution: Demand "Click-Only" attribution reporting or use a third-party tool like TripleWhale to verify the truth.

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