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The goal of advertising is to make a business money, but conflicts of interest are all too common. Agencies talk a big game about protecting their clients' long-term interests, but many agencies fail to serve their clients first when their financial incentives don't align.

As a marketer, you need to know your agency's potential conflicts of interest to make sure you're getting the results you're paying for.

Red Flags

At the root of agency conflicts of interest is a historical payment system based on percentage of ad spends. That motivates agencies to increase their revenue by spending more on paid advertising.

The biggest culprits include display advertising fraud, pay-per-click (PPC) advertising, and commission-based affiliate marketing.

Display advertising fraud

Display advertising fraud is a huge issue. Advertisers devote billions of dollars to online display ads, often purchased "programmatically" or through buying software that automatically places ads on sites that fit a brand’s media plan.

However, at least 36% of clicks from display ads may be fake. So, marketers not only pay a lot of money for worthless traffic, but agencies also have little motivation to fight fraud—they're compensated on a percentage of spend and want increased volume.

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ABOUT THE AUTHOR
image of Robert Glazer

Robert Glazer is the founder and managing partner of Acceleration Partners, founder & chairman of BrandCycle, and author of Performance Partnerships: The Checkered Past, Changing Present and Exciting Future of Affiliate Marketing.

LinkedIn: Robert Glazer

Twitter: @robert_glazer