"No win, no pay" is the single biggest red flag.

The pitch

"If we don't deliver, you don't pay us." It's an easy line to like. It sounds like the agency is putting real skin in the game, and like the downside for you is capped at zero — worst case, you got free management. Win win, or so the pitch goes.

Why the pitch is backwards

An agency willing to work for free if they miss target is, by definition, an agency that expects to hit target easily — or one that's priced the fee low enough that missing it costs them almost nothing. Either way, the arrangement is built around protecting the agency's downside, not yours. Your downside was never the fee. It was always the underperformance itself, and the fee is a rounding error next to it.

The worked example

Say you're spending £100,000 in December. Target is 300% ROAS — £300,000 back. The agency's fee is £5,000, contingent on hitting that target. Miss it, and you don't pay.

They deliver 250% ROAS instead. Target missed — so you don't pay the £5,000. Free ad management, technically.

The real cost was never the fee

The fee is small and visible, so it's what gets negotiated over. The underperformance is large and gets absorbed quietly into "well, at least we didn't pay them" — even though it's the number that actually matters. A no-win-no-pay structure doesn't remove that risk. It just moves your attention away from it, right when you should be watching it most closely.