This person's thinking is flawed. That's like saying why pay a plumber or a lawyer when you can read some books and fix your drain or go to court yourself. People underestimate the skill it takes to run marketing campaigns. Anyone can set them up but that does not mean anyone can make a campaign or an ad account profitable and help a growing business.
There are lots of payment models for agencies: hourly, flat monthly fee, percent of ad spend or a percent of top line revenue. Each agency will pick a model that works for their business. Each brand needs to find an agency that will work in a fee structure that works for them. My agency, Take Some Risk, does a mixed model with a monthly strategy fee and then 10% of ad spend.
It's easy to spend money on ads and not see a return of any kind. Percent of spend does that always motivate people to make a business profitable. Some clients also find it hard to fire an agency, even if they are wasting money, because it's easy to just keep them then go and look for a new one. Hope you found this helpful, if so please click "like" below to let me know.