Most agencies track marketing activity. Clicks, impressions, followers, campaigns launched. Far fewer track marketing performance indicators – in other words, whether any of it actually moved the needle. Daniel Dunn, CEO and co-founder of growth agency Paper Planes, put it plainly on a recent episode of the Fractional CFO Show. Budgets tend to follow habit and pressure rather than evidence, with money defaulting into search, Meta or whatever channel is currently getting attention because nobody wants to be the one who suggested pulling back. The result is a marketing spend line that looks busy but tells the finance function almost nothing about return.
That gap between activity and proof is exactly where marketing performance indicators earn their keep. It’s a gap that matters just as much to agency owners spending their own marketing budget as it does to the clients they serve.
Why activity metrics are not marketing performance indicators
Dan’s background runs from Disney World through Dunnhumby, where he worked on Tesco Clubcard, before co-founding Paper Planes nine years ago. That data-driven grounding shapes how he thinks about spend. His view is that marketing decisions get made under FOMO rather than evidence: a proportion of budget goes to search because it “just has to”, another slice goes wherever competitors or the board expect to see activity. None of that tells you whether the spend produced anything that would not have happened anyway.
That distinction, between correlation and causation, is the core of what a genuine marketing performance indicator should measure. Vanity metrics answer “did something happen.” Performance indicators answer “did our spend cause it to happen.”
Building marketing performance indicators around test and control
The method Dan uses to close that gap is straightforward and doesn’t rely on expensive tools. He described it as testing a proportion of budget against a control group to isolate what a channel is actually contributing:
“It’s not black magic in terms of applying test and control or A-B methodologies in order to understand incrementality.” (Daniel Dunn)
How it works in practice
The practical version for a growing agency: hold back a small, defined slice of spend or audience from a channel, compare outcomes against the group that received it, and use the difference as your real marketing performance indicator for that channel. Forrester’s overview of incrementality testing sets out the same principle, treating marketing spend as something to be proven, not assumed. Google’s guidance on marketing incrementality breaks this down further, distinguishing between testing a single channel in isolation and testing how channels perform together, both useful lenses depending on how many channels an agency is running at once.
One simple rule
Dan applies a simple rule to every channel his agency invests in:
“Every channel I invest in has to have return on investment that comes off the back of it… If we see it return in, then more money goes in.” (Daniel Dunn)
For agency founders working with lean marketing teams, the discipline worth borrowing is smaller and more frequent testing rather than one annual review. Dan’s own recommendation is to trial one new channel every quarter with a modest budget, measure the incremental return, and only scale what proves itself. Underperforming spend gets reallocated rather than simply cut, which keeps total marketing spend broadly flat while pushing it toward channels with proven return. That kind of rolling reallocation only works if it feeds into your wider cash flow forecast, so the finance function can see the shift coming rather than reacting to it after the fact.
Where AI fits, and where it does not
Dan was candid that much of what gets called AI-driven marketing is really speed and access to data that already existed.
“AI is driving change and the way in which AI is driving change is that it’s making data accessible to people in a way that we have never seen before.” (Daniel Dunn)
The caveat he added matters just as much: AI output still needs someone with judgement to interpret it, because the underlying discipline of testing and measurement has not changed, only how quickly you can act on the results.
Why this belongs with finance leadership, not just your marketing team.
This is where the finance function for marketing agencies becomes important. Test-and-control results only translate into better decisions if someone is connecting channel-level performance indicators back to gross margin, cash flow timing and overall profitability. A channel that shows strong incremental conversions but poor payback period is not a good use of budget, and spotting that requires a financial lens on top of the marketing data. This is precisely the kind of connection a fractional CFO makes as part of an integrated finance function.
ACC’s CFO Perspective
We see this pattern often in client work: marketing budgets that look disciplined on paper but have never been tested against a control group, so nobody can say with confidence what is actually driving growth. The fix rarely needs new software. It needs someone connecting channel performance back to margin and cash flow on a regular cycle, and holding the line when a channel that “feels” like it is working doesn’t show up in the numbers.
One book and one podcast worth your time
Dan recommended How to Make a Billion by Richard Harpin, former CEO of HomeServe and Checkatrade, describing it as a founder’s account of scaling from small beginnings to billion-pound outcomes. For something unrelated to business, he pointed listeners to The Rest Is History podcast as his way of switching off from the numbers entirely.
Turning testing into a habit
Testing one channel at a time will not transform a marketing budget overnight, but it replaces guesswork with evidence, which is the whole point. For agency founders, the discipline is the same one that applies to any part of the business: measure what actually happens, not what looks like activity, and let the finance function connect that back to margin and cash flow.
Frequently Asked Questions
What are marketing performance indicators for agencies?
Marketing performance indicators are metrics that measure the actual impact of marketing spend rather than activity alone. Unlike vanity metrics such as impressions or followers, genuine performance indicators show whether a campaign or channel produced results that would not have happened without it.
How can a smaller agency measure marketing ROI without expensive attribution tools?
A simple test-and-control approach works without enterprise software. Holding back a defined slice of spend or audience and comparing outcomes against a group that received the campaign isolates the incremental impact, giving a realistic view of return on smaller budgets.
Should marketing performance sit with the marketing team or the finance function?
Both, ideally. Marketing teams generate the channel-level data, but connecting that data to gross margin, payback periods and cash flow timing needs financial oversight. Accountants for marketing agencies bring that commercial lens, turning performance indicators into decisions about where budget should actually go.
How often should agencies review their marketing performance indicators?
Quarterly reviews strike a reasonable balance, giving enough time for a test to produce meaningful data without letting underperforming spend run unchecked for too long. Testing one new channel each quarter, alongside reviewing existing channel performance, keeps the marketing budget under continuous scrutiny.
ACC Finance Team
ACC Finance are a team of experienced CFOs and management accountants who combine executive financial leadership with practical commercial judgement to work closely with founders and leadership teams to strengthen margins, improve cash flow, and guide critical financial decisions.
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