How a Fractional CMO Audits Your Marketing Agency
July 6, 2026
If you are paying an agency five figures a month and cannot say with confidence what you get for it, you are asking the right question. Most owners between $2.5M and $25M in revenue carry the same quiet worry: the reports look fine, but the pipeline does not feel like $15,000 a month of progress.
An agency audit replaces that worry with evidence. It takes two or three afternoons, and most of it happens inside accounts you already have a right to access. No consultant required, no confrontation until you have facts.
What follows is the sequence a fractional CMO runs in the first weeks of an engagement with an incumbent agency in place. Run a version of it yourself and you will know whether to fix the relationship, renegotiate it, or end it.
Start with the money
Map every dollar from invoice to deliverable before you look at a single performance metric. This one step usually tells you more than any dashboard.
Say you pay a $15,000 monthly retainer. Ask the agency to split it into media and fee. A typical answer: $8,000 in ad spend passed through to Google and Meta, $7,000 in agency fee. Now push on the fee. Ask for the hours behind it, by role, for the last full month.
A healthy answer looks like this: account lead 8 hours, media buyer 14 hours, designer 10 hours, analyst 6 hours. That is 38 hours. At a blended rate of $150 an hour, it prices out at $5,700 against a $7,000 fee. Agencies need margin to survive, so a gap of 20 to 35 percent between priced hours and fee is normal and not the problem. What you are checking is whether the hours are real and attached to deliverables you can name: these ads, that landing page, this report.
If the agency cannot or will not produce the split, that is your first finding. Retainers that have run untouched for two or more years usually contain 25 to 40 percent of fee attached to work that quietly stopped happening. The scope aged out; the invoice did not.
The report-versus-revenue gap
Agency reports live in one world. Your P&L lives in another. The audit forces them into the same room.
Pull the last quarter's reports and write down the headline number, usually called conversions or leads. Then open your CRM, your call log, and your inbox for the same period and count actual inquiries from new prospects.
Picture a $4M B2B services firm whose agency reported 120 conversions last month. Dedupe them, then strip out spam, vendors, job applicants, and existing customers calling the main line. In well-instrumented accounts, 60 to 80 percent of reported conversions survive scrutiny as real leads. In accounts that count button clicks, PDF downloads, and every phone call over ten seconds, the survival rate usually drops to 30 to 50 percent.
Now redo the cost math. If 120 conversions against $8,000 in media implied a $67 cost per lead, and only 48 survive as real inquiries, the true figure is $167. Carry it one step further: if 20 of those 48 were qualified, you paid $400 per qualified lead. That number is the one every other decision in this audit hangs on, and it almost never appears in the agency's deck.
One caution while you do this: the gap is not always the agency's fault. Sometimes the tracking was set up years ago by a web developer and nobody owns it. Part of the audit is assigning ownership of the number, because a metric nobody owns degrades every quarter.
The account ownership check
Before you change anything, confirm you could walk away tomorrow with your assets intact. Log in yourself, not through a screen share, and confirm your business holds admin access to:
- Google Ads and the Google Analytics property
- Meta Business Manager and the ad account
- Google Business Profile and other listings
- Your domain registrar, DNS, and website hosting
Say you run an $8M home services company and discover the ad account was created inside the agency's manager account, under their ownership. Leaving now means starting a fresh account with no history and no learned audience data, and the re-ramp typically costs 4 to 8 weeks of degraded performance. That is not a reason to stay. It is a reason to demand ownership transfer in writing this week, while the relationship is still cordial. Any agency that resists transferring assets you paid for has answered a bigger question than the one you asked.
Media efficiency spot checks anyone can run
Two reports expose most paid media waste, and neither requires technical skill to read.
First, the search terms report in Google Ads. Set the date range to 90 days, sort by cost, and read the top 100 rows. You are looking for searches that could never become your customer: other cities, DIY queries, job seekers, products you do not sell.
Say you spend $20,000 a month on search. In accounts that have not been audited in a year or more, irrelevant terms typically consume 10 to 25 percent of spend. Take a midpoint of 18 percent: that is $3,600 a month, or $43,200 a year, buying clicks that were never going to call you. Finding this takes about an hour and requires no login beyond read access.
Second, the placement report for Display and Performance Max campaigns. If a meaningful share of budget lands on mobile games and low-grade apps, you have likely found the mechanical explanation for the report-versus-revenue gap: plenty of cheap conversions on paper, few real inquiries in the CRM.
If you have five more minutes, check the geographic report too. Service businesses regularly discover 5 to 10 percent of spend leaking into cities they do not serve, usually because location settings were left at defaults that include people merely interested in the area rather than located in it.
The creative and testing cadence question
Ask the agency one simple question: what did we test last quarter, and what did we learn?
A healthy account has a visible rhythm. New ad concepts monthly or close to it. A landing page or offer test each quarter. A written record of what won, what lost, and what changed as a result. Testing is not a luxury; paid media performance decays as competitors iterate and creative fatigues, and testing is the maintenance schedule.
You can verify the answer independently. Open the change history in Google Ads for the last 90 days. Say your $12,000 a month account shows six meaningful changes in that window, mostly budget nudges and a paused keyword. That is an account on autopilot, and autopilot accounts typically drift 10 to 20 percent worse per year while the retainer stays flat. The management fee is supposed to buy iteration. If the change log says nobody is iterating, you are paying a full fee for a parked car.
The contract review
Read the agreement you probably have not opened since signing. Four clauses matter most.
Notice period. Thirty days is fair. Ninety days plus an annual auto-renew is a trap that turns a bad quarter into a bad year. Data portability. The contract should state plainly that ad accounts, audiences, creative files, and analytics are yours on exit. Markup disclosure. If the agency buys media as principal, takes a percentage of spend, or resells tools, the contract must say so and state the rate. Work product. Creative made with your money should belong to you when you leave.
Say your contract permits an undisclosed 15 percent markup on media. On $8,000 a month of spend, that is $1,200 a month, $14,400 a year, sitting invisibly on top of the stated fee. A markup is not automatically improper. But you cannot judge value for money while part of the price is hidden, so surfacing it is part of the audit, not an accusation.
What a fair verdict looks like
Most audits should not end with a firing. In our experience, roughly half of incumbent agencies are fixable, because the underlying problems are usually attention and accountability rather than competence. The relationship drifted; nobody reset it.
A fair path is a written 90-day cure period with four demands. Tracking rebuilt within 30 days so reported conversions reconcile against your CRM. Identified wasted spend cut by at least half in the first billing cycle. A documented monthly testing cadence with results shared in writing. And reporting that leads with cost per qualified lead, reconciled to your pipeline, instead of impressions and clicks.
Then hold them to reasonable ranges, not miracles. Wasted spend down 50 percent or more in the first cycle is achievable because it is mostly exclusions. Cost per qualified lead usually improves 15 to 25 percent by day 90 once tracking is honest and waste is cut. Full account ownership should transfer in week one, because it requires nothing but willingness.
If the agency hits those marks, keep them, and put a light version of this audit on an annual calendar. If they argue with the scorecard instead of working it, you have your verdict, and it cost you three afternoons instead of another year of retainers.