Before investing in a Digital Ad Agency

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Questions to ask before investing in a Digital Ad Agency

60 due diligence questions.

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Strategy

  1. What is the approach to acquiring new clients?
  2. Is the agency focussed on B2B, B2C, or operating in both verticals?
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The product

  1. What makes this agency unique compared to the competitors?
  2. Is the agency a fully integrated agency?
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Founders and current owners

  1. Is the founder still in the company?
  2. Who is the majority owners of the company?
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Financials

  1. How much of the annual income is from recurring customers?
  2. What is the accounts receivable turnover ratio?
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Investors and financing

  1. How much debt does the agency have to its investors?
  2. How many investors does the agency have?
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Daily operations

  1. Who is responsible for day-to-day operations?
  2. How does the agency handle day-to-day customer service?
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Marketing

  1. Is the agency a certified Facebook partner?
  2. Is the agency a certified LinkedIn partner?
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Human resources

  1. Is the agency using non-compete agreements?
  2. How long have the core creative people been working with the company?
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Sales

  1. How much of the sale is from recurring customers?
  2. How much was the combined ad spent by the agency in the last 30, 90, and 180 days?
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Competitors

  1. Who are the biggest competitors in the local market?
  2. Is the agency competing with international competitors?
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Legal and accounting

  1. Are the financial statements audited?
  2. Does the company offer credit lines to clients?
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The future

  1. What efforts are the agency putting into staying op to date with new digital marketing platforms, tools, and strategies?
  2. What will be the next digital market place that the agency will have to focus on?
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