When starting out, you may try to handle all of the issues of advertising by yourself, dealing with media sales reps, and handling creative and media buying decisions on your own. As a business evolves and grows, these tasks become significant and distract from the core role of running the day to day operations of your business. This is a good time to consider bringing in outside expert help and advice, typically from an ad agency.
While cute creative may be good enough for some clients, for growig busineses, you want to measure how well your agency is doing against some yardstick, to ensure they are working are and achieving results like any others in your organization. This way you also know they are fairly compensated (not too high, and not too low). To know if your agency is doing a good job, here is an introduction to how agen cies typically measure their own performance.