Definition
What is execution debt?
Execution debt is all the corrective work a company must fund before it can make progress, following a poorly executed engagement. It covers the configurations to redo, the data history to rebuild, the content to rework and the access to recover. Unlike a growth investment, execution debt produces no gain: it brings the company back to where it should already have been.
Its four forms
- Sloppy configurations, especially in measurement, cast doubt on every earlier figure.
- A broken history deprives learning tools (automated bidding, for example) of their raw material.
- Content produced in volume and without depth has to be removed or reworked.
- Scattered access that nobody documented has to be recovered.
None of these forms appears in a takeover proposal: they are discovered along the way. That is why an audit comes before the engagement rather than alongside it.
How to recognize it
Execution debt shows up as a first quarter spent correcting rather than progressing. A taken-over engagement can take three to six months to produce a measurable result, including one to two months of pure catch-up. Judging the new vendor on that period means assessing them on their predecessor's work.
What makes it grow
The order of operations changes the amount. A company that terminates before inventorying its access loses the outgoing vendor's cooperation. Yet Google states that transferring billing for an ad account to a new agency has to be initiated by the previous agency. Removing content before measuring what it brings in can also turn a disappointment into a real loss.
Execution debt = audit and inventory + measurement rebuild + configuration and content fixes + opportunity cost
The opportunity cost is the return lost during the catch-up period. It appears on no invoice, but it is real.
A company changes advertising vendors. The audit shows that conversions had been counted twice for a year: every earlier report overstated the results. Measurement has to be rebuilt, then bidding has to relearn on accurate data for a few weeks. Those two months produce no additional sales. They make up the execution debt, which should be costed and presented separately from growth work.
We name and cost execution debt separately from growth work, before the contract is signed. Folded into a monthly retainer, it leads the company to believe it is paying to progress when it is paying to correct. Management may then judge harshly a vendor who did exactly what was needed.
The debt is prevented with the next engagement: a metric of closed sales and margin tracked every month, access held in the company's name, and one person inside the company responsible for the file.
Not to be confused with
- Technical debt
- Technical debt refers to programming shortcuts that will have to be reworked later in software or a website. Execution debt covers poorly done marketing work: measurement, campaigns, content and access.
- Website redesign
- A website redesign rebuilds a site to go further than what exists. Execution debt only brings the company back to where it should already have been.
Related concepts
- Digital asset ownership
- Proposal review grid
- Engagement contract framework
- Sustainable fee ceiling
- Executive dashboard
Further reading
- Changing marketing agencies: assessing the cost of a handover
- Ad accounts and data: who owns your digital assets?
- How to compare marketing agency proposals
- Marketing agency pricing: retainer, project fee or hourly rate?
- Marketing agency fees: what can your business afford?
Related services
Frequently asked questions
Do we have to redo everything when we change agencies?
No. Average content that generates requests remains an asset until it is replaced by something better. Measure first what each element brings in, then replace in order of return.
Should the catch-up work appear in the new vendor's proposal?
Yes, named and costed separately from growth work. When catch-up is folded into a monthly retainer, you believe you are paying to progress when you are paying to correct.
