Digital agency red flags: when should a UK firm walk away?

The advertising code every UK agency is bound by settles more of this than buyers realise. Rule 3.7 of the CAP Code requires a marketer to hold documentary evidence for an objective claim before publishing it, and rule 3.47 requires contact details for whoever gave a testimonial. An agency that can produce neither is not being cagey with you. It is short of something the code says it should already have on file.

That is the difference between a red flag you can act on and one you can only feel. Search this question and you are handed a list of six warning signs, or seven, published almost without exception by an agency naming the failings its competitors have. None of them tell you what a flag is worth. A few mean stop. Most mean ask a better question, then write a clause. Confusing the two costs a practice a supplier it needed, or a year it cannot get back.

Sort the flag before you sort the shortlist

A flag is terminal when it concerns honesty or control, and negotiable when it concerns capability or price. That single test does more work than any list of warning signs.

An agency that has never worked with a tax advisory firm has a capability gap, and a longer discovery phase closes it. An agency that claimed thirty staff when its filed accounts record four has a different kind of problem, and no clause fixes it. You will spend the engagement checking everything you are told.

Control behaves the same way. A twelve month term is a commercial position you can trade against. A contract that leaves the agency owning your website is a structural transfer, still true on the day you decide to leave.

What the website tells you before anyone picks up the phone

A company must publish its registered number, its registered office address and the part of the United Kingdom in which it is registered on its own website. That is regulation 25 of the Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015, not an optional courtesy of a well-built site.

A missing company number does not make an agency a bad agency. It does mean the supplier you are about to trust with your practice's public communications has not read the rules covering its own.

The number matters because it unlocks the rest. Put it into the Companies House register and the filed accounts are free to read. A private company has nine months from its accounting reference date to file, and the penalty starts at £150 and reaches £1,500 once accounts are more than six months late, both published on gov.uk. An agency seeking a twelve month commitment while its own filing is overdue has not disqualified itself. It has given you a question to ask before the term is agreed.

The claims in the pitch are already governed

A guarantee of a Google position is the one flag that needs no judgement from you at all. Google's own guidance for people hiring search help says that no one can guarantee a number one ranking and advises being wary of anyone who claims to. You do not need to win the technical argument in the room. You can send the page afterwards.

The rule underneath that example is the more useful thing. Rule 3.1 of the CAP Code says a marketing communication must not materially mislead, and rule 3.7 requires documentary evidence, held before publication, for any claim a reader would take as objective. “Award-winning” is an objective claim, and so is “trusted by two hundred firms”. Ask which award and which two hundred. An agency holding that evidence sends it the same week.

Rule 3.47 goes further on testimonials: the marketer must hold evidence that one is genuine, and contact details for whoever gave it. Asking to speak to that client is a request for something already on file. A refusal offering a comparable alternative is workable. A refusal with nothing in its place is the flag. Our piece on what to ask an agency, and how to verify each answer pairs every question with the record that settles it.

The clauses that decide what you keep

Two provisions do most of the work at this stage, and only one is about copyright.

The first is section 11 of the Copyright, Designs and Patents Act 1988, which makes the author of a work its first owner unless it was made in the course of employment. An agency you commission is not your employee, so absent a written assignment it owns the design and the code you paid for. The flag is not an agency that says you will own the work, because nearly all of them say that and mean it. It is one that cannot point at the clause.

The second is the one UK firms most often miss. Where your firm contracts on the agency's own written standard terms of business, section 3 of the Unfair Contract Terms Act 1977 stops the agency excluding liability for its own breach, or rendering a performance substantially different from what was reasonably expected, except so far as the term satisfies the requirement of reasonableness. A sweeping exclusion in standard terms is not automatically enforceable. It is a clause that would have to survive a reasonableness test.

What no statute gives you is a way out afterwards. A firm appointing an agency is not a consumer, so there is no cooling off period, and the fourteen days a managing partner half-remembers is consumer law. Whatever the contract says about notice is the exit you have, which is why this is the last cheap stage.

When not to hire an agency yet

Two flags point back at the buyer, and no agency will raise them with you. If nobody in the practice can approve work inside a week, the agency bills you for the wait and the first quarter reads as its failure. If no baseline is recorded before work starts, month four becomes an argument about attribution rather than results. Both are fixable in a fortnight, before anyone is briefed.

There is also the case where no agency should be appointed at all. Where the job is one piece of work unlikely to recur, a freelancer will usually do it better and for less. We say so when that is the answer, which costs us the introduction. Our page for professional services firms sets out what we assess before recommending anyone, and the wider guide to choosing a digital agency covers the decision this post handles only the exit from.