Marketing Agreement

Essential Elements of a Marketing Agreement

If you’re a business owner, you likely have a seemingly infinite number of tasks on any given day—and activities related to marketing your business can dominate that list.

While there are plenty of resources to help you understand how to create a marketing plan and do your own marketing for your business, sometimes it is a good idea to leave it up to the subject matter experts. This means hiring a marketing agency or consultant to take care of the marketing of your small business for you.

While this can free up your time significantly—not to mention leave it to the pros to do what they do best and market your business—working with an outsider on something so important means that you need to think through logistics.

In this case, you need to draw up a marketing agreement.

What Makes a Great Marketing Agreement?

A marketing agreement is a document, signed by all parties involved, that lists the scope of work to be undertaken, and any duties and expectations that the business has of the marketing agency.

A marketing agreement is:

A written document
Drawn up by one party
Agreed upon by all involved
Inclusive and descriptive of all marketing work done by the outside agency or consultant
Clear in scope

Like any business contract, a marketing agreement discusses what is expected of the hired marketing agency or consultant, and goes into detail in terms of the scope of work they’ve been hired for. It is a legal document that serves to illustrate what a marketing agency or marketing consultant is being hired to accomplish. It acts as a record of what has been agreed upon by all parties, and it goes into detail on logistics such as payment, timeline, and deliverables.

It serves also as a written record that protects all parties, as it clarifies what is expected of who and by when. This way, for example, the business cannot falsely claim that the marketing agency did not hold up their end of the deal, since the marketing agreement clearly defines the scope of the project.

What Should Be Included in a Marketing Contract?

Unlike other types of business contracts, a marketing agreement is not a contract with a clearly defined structure that needs to be followed. There are elements that will exist in the majority of agreements, but there is not one set structure that all businesses use.

So, all marketing agreements will have a discussion of payment terms, timeline, and some articulation of the work being done by the marketing agency. There may also be a section covering legal matters such as copyright protection, nondisclosure, or other provisions related to a business’s proprietary information.

A marketing contract will likely also include details on what parties will do if the agreement needs to be dissolved prematurely, and a clear outline of what success looks like, so that the business can determine whether or not the marketer has successfully accomplished what they were hired to accomplish.

If you want a template to work off of, it can make creating a marketing agreement much easier.

Tip: Along with this article, you’ll be able to download a free marketing agreement template, which will give you a guideline that will help you create your own marketing agreement.

Even if you work off of a template, however, you will need to tailor your marketing contract for your unique situation, your industry and business, and the scope of work that you are hiring your external marketer for, so be sure to read through the elements of a marketing agreement to make sure you have covered all your bases.

The Elements of a Great Agreement

So, what does a marketing contract actually include? To be used by your business, an agreement needs to include the following:

1. Discussion of exclusivity

Typically, a contract will give exclusive rights to the marketing agency or consultant to do marketing, public relations, and so on for the business or product for the duration of the contract.

That is to say, if a marketing agency was hired by a small business to promote a new product, the marketing agreement would stipulate that no other marketing agencies will be involved in marketing said product for the duration of time specified.

This means clearly identifying the client (the business) and the consultant (the agency or marketer), and will outline the duration or scope of the project, clarifying that no other agency will be used during that time frame.

2. Timeline details

As mentioned above, a timeline is a needed part of a marketing agreement. For one thing, the agency or consultant will not have exclusive rights to do the business’s marketing forever; they are likely hired on for a specific length of time (to promote a newly launched product, service, or business, for example), or to promote a specific product or service.

So, a marketing agreement needs a clarified timeline, to be agreed upon by the client and the consultant. This is typically one to two years, however, the timeline is dependant on the needs of the business.

3. Payment and cost details

The nuts and bolts come into play here—what is the overall cost of hiring the agency or consultant, and how and when will they be paid?

This section of the marketing agreement should clarify the overall exact payment amount, as well as any details on payment structure. So, this could look like a discussion of monthly payments, clarification of complete payment up front, and so on. Getting prior written consent on payment terms is a must.

4. Project-specific details

This is the most flexible part of the marketing agreement; after all, every agreement will look different.

Take some time at the outset to make note of the details of the project you hope to hire an outside marketing firm to accomplish, as you’ll work those details into the agreement. What type of work are you hiring them for? Are they writing a complete advertising and marketing plan for your entire business as a whole, or simply marketing a single new product? What avenues are you interested in pursuing—are you hoping for a well-structured social media campaign, PR outreach to local media, paid advertising, and so on?

Include the necessary details here. Remember, a marketing agreement serves as a record of your expectations, so getting on the same page in terms of what you hope to receive from your chosen agency gives you the best chance possible to have a satisfying working relationship.

5. Timeline for completion

As I touched on earlier, you will need to clearly lay out when the different components of the project are due, how long you plan to work with the agency or consultant, and any other date-specific information.

So, if the project involves certain deliverables that will be completed by a certain date, list that here, and also clarify the overall timeline that the relationship covers (a one year contract, two years, and so on).

6. Guarantees

Will you need to see certain metrics improving in order to measure success? Do you expect to see a certain increase in sales volume, or search traffic, or some similar area where the marketing consultant needs to move the needle? Include a discussion of that here, including any periodic check-ins, and perhaps make mention of where your numbers currently stand so as to establish a baseline.

7. Any legal disclaimers, insurance information, confidentiality, or similar

Depending on your industry, there may be certain legalities that need to be discussed in terms of your marketing agreement. There may even be a discussion of taxes, and who will pay what. In addition, be sure to cover any information about insurance, if applicable.

If your business relies on sensitive intellectual property or proprietary information, you may need to include information about how this will be handled. This includes, potentially, a discussion of ownership of property—that is to say, you may need to go into detail about who owns existing elements of your business, and also who will own anything created by the marketing agency or consultant during their tenure with your company.

Also, if you are requiring that your contracted marketer sign a non-disclosure agreement, you will need a section on confidentiality. This usually looks like a statement of the fact that a signed non-disclosure agreement exists, not the actual agreement itself—that is something you will have to work out at a different time and via a different agreement.

Do You Really Need a Marketing Agreement?

So, we’ve gone over the basic nuts and bolts of a marketing agreement.

But, is it really necessary to have one? Why isn’t it enough to simply hire a contractor or agency for a specific period of time and let them do their magic? Isn’t the whole point of hiring an outside marketing agency that you can free up time and not worry about marketing your business?

Well, yes. Technically, you can go without ever having to draw up a marketing contract, if your contracted agency or consultant is on board. However, there are several important advantages to having a marketing agreement in place. While there are downsides, the pros seem to outweigh the cons.

The Pros of Having an Agreement

Accountability: There is a clear illustration of the responsibilities of all parties involved.
Clarification of scope: Everyone will understand what the scope of the project actually looks like, ensuring a satisfactory working relationship.
Reduced risk of miscommunication: You are less likely to butt heads over something like when payments are due, or the expected outcome of the project, if everything has been clarified up front.
A written consent: If, worst case scenario, the relationship goes sour, you are protected by the fact that you have a record of everything that was agreed upon by all parties involved. If a disagreement occurs, you can always reference the applicable law.

The Cons of Having an Agreement

More time-consuming than not having an agreement at all: Clearly, it is more time and labor intensive to create a marketing agreement than it is to skip the process entirely.
Things can still slip through the cracks: While you may attempt to cover all your bases, it’s true that it is not always feasible to protect yourself from all possible negative outcomes.
Some agencies or consultants may be reluctant to sign something so official: There may be those out there that reject the idea of signing what feels like a formal contract.

While these cons do exist, the reality is that they are slight when compared to the benefits. Beyond a small amount of time up front, having a marketing agreement does not pose a significant investment of time. And, while it is true that you cannot always protect yourself from every eventuality, having an agreement in place is still great insurance against a falling out or bad relationship—and will make it much more likely that everyone is on the same page, and that the relationship goes smoothly.

Finally, while there may be some agencies or consultants who do not wish to sign a marketing agreement, this should not deter you; rather, it should serve as a bit of a red flag! The reality is that having a marketing agreement in place protects both the small business and the hired marketer, so it is in everyone’s best interests to have one in place from the start.

Best Practices for Agreements

While not required, here are some key areas to think about when constructing your marketing agreement that will make determining success easier.

Include a section defining key terminology. This includes how parties will be referred to throughout the document (i.e., “Client,” “Consultant,” and so on).

This often looks something like this:

This Marketing Services Agreement (“Agreement”) is being made between [Customer Name] (that’s “You” or “Your”) located at [Street Address, City, State] and [Company Name] (that’s “We” or “Us”) located at [Street Address, City, State] on [Month DD, 20YY]. [Customer Name] and [Company Name] may also be referred to as “Party” or together as the “Parties”. This Agreement will become effective on [Month DD, 20YY] (“Effective Date”).

Be clear on the numbers. What actual, concrete metrics are you looking to improve, and what does improvement look like in numerical terms? Having an actual hard number helps hold your contracted marketer accountable, and makes it easier to see if their efforts are actually benefiting your business in the way you had hoped.

Clarify what type of communication is required. So, you say regular updates are needed, and you have laid out a timeline. Do these updates come in the form of an in-person meeting? A Skype call? An email update? Specify what you are expecting.

Define what success looks like. Building off the idea that having actual concrete numbers can only help you, make sure you have a crystal clear articulation of what a successful relationship between your business and the marketing agency or consultant. Fluffy language like “improve social media presence” is not the best way to define success; make it as clear and measurable as possible.

Include information on termination. What happens if you feel that the agency you’ve hired isn’t quite measuring up? It’s a good idea to cover what will happen should you decide you no longer want to see the relationship through to the end of the specified timeline.

Keep the legal nature of the agreement in mind. Make no mistake—a marketing agreement serves as a legal document. So, it is a good idea to have a lawyer look over your agreement before you pass it off to the agency or consultant you plan to hire. And once you're ready, consider pairing your contract with easy Docsketch electronic signatures to automate your workflow.

This Marketing Services Agreement (“Agreement”) is entered into ________________ (the “Effective Date”) by and between __________________________ (the “Client”) located at _____________________________________________ and ___________________________ (the “Marketer”) located at _____________________________________, individually referred to as “Party”, and collectively the “Parties”.

WHEREAS, the Client is in need of marketing services; and

WHEREAS, the Marketer has the ability to provide such services;

IN CONSIDERATION of, the mutual promises, covenants, and conditions contained herein, the Parties agree as follows:

Services. The Client hires the Marketer to perform the following marketing services (the “Services”):
____________________________________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________

Fees. The Client agrees to pay the Marketer the following fee for the Marketer’s performance of the Services. Payment shall be made in accordance with the schedule set forth below.

Total Cost of the Services: ____________________

Amount Due Upon Execution of Agreement: ____________________

Amount Due Upon Completion of Services: ____________________

Expenses and Payment.
1. Expenses: The Marketer may incur expenses that are not included in the fee for the Services. The Marketer will keep an accurate record of expenses incurred as part of performance of the Services. The Marketer shall submit an invoice to the Client for these expenses, along with receipts, every __________ days/upon completion of the Services.
2. Expense Approval.

_______ Any single expense over $_____ shall require the Client approval in writing prior to payment of the expense.

_______ All expenses shall require the Client approval in writing prior to payment of the expense.

Payment. Invoiced amounts must be paid within ______ days of receipt of the invoice. Payments shall be made by electronic payment/check/money order. Payments shall be issued as follows:

________________________________

Term and Termination.
1. The term of this Agreement is __________________, commencing upon the Effective Date as stated above.
2. This Agreement may be terminated at any time by either Party upon written notice to the other Party. The Client will be responsible for payment of all Services performed up to the date of termination, except for in the case of Contractor’s breach of this Agreement, where Contractor fails to cure such breach upon reasonable notice.
Confidentiality. During the course of this Agreement, it may be necessary for the Client to share proprietary information, including trade secrets, industry knowledge, and other confidential information, with the Marketer in order for the Marketer to complete the Services. The Marketer will not share any of this proprietary information at any time. The Marketer also will not use any of this proprietary information for the Marketer’s personal benefit at any time. This section remains in full force and effect even after termination of the Agreement by its natural termination or early termination by either Party.
Relationship of the Parties.
1. No Exclusivity: The Parties understand this Agreement is not an exclusive arrangement. The Parties agree they are free to enter into other similar agreements with other parties.
2. Independent Contractors. The Parties agree that the Marketer is providing the Services under this Agreement and acting as an Independent Contractor and not as an employee. This Agreement does not create a partnership, joint venture, or any other fiduciary relationship between the Client and the Marketer.
Ownership Rights. The Client continues to own any and all proprietary information it shares with the Marketer during the term of this Agreement for the purposes of the Project. The Marketer has no rights to this proprietary information and may not use it except to complete the Services. Upon completion of the Agreement, the Client will own the final marketing services. While the Marketer will customize the Client’s marketing materials to the Client’s specifications, the Client recognizes that marketing materials generally have a common structure and basis. The Marketer continues to own any and all template designs it may have created prior to this Agreement. The Marketer will further own any template designs it may create as a result of this Agreement.
Limitation of Liability. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR ANY DAMAGES RESULTING FROM ANY PART OF THIS AGREEMENT SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFIT OR LOST BUSINESS, COSTS OF DELAY OR FAILURE OF DELIVERY, WHICH ARE NOT RELATED TO OR THE DIRECT RESULT OF A PARTY’S NEGLIGENCE OR BREACH.
Waiver. Neither Party can waive any provision of this Agreement, or any rights or obligations under this Agreement, unless agreed to in writing by the Parties. If any provision, right, or obligation is waived, it is only waived to the extent agreed to in writing.
Assignment. Neither Party may assign its rights and/or obligations under this Agreement.
Dispute Resolution.
1. Choice of Law. The Parties agree that this Agreement shall be governed by the State and/or Country in which the duties of this employment Agreement are expected to take place. In the event that the duties of this Agreement are to take place in multiple States and/or Countries, this Agreement shall be governed by _________ law.
2. Negotiation. In the event of a dispute, the Parties agree to work towards a resolution through good faith negotiation.
3. Mediation/Arbitration: If the dispute cannot be resolved through good faith negotiation, either Party may initiate mediation or binding arbitration in a forum mutually agreed to by the Parties.
4. Attorney’s Fees. In the event of Arbitration and/or Mediation, the prevailing Party will be entitled to its legal fees, including, but not limited to, its attorneys’ fees.
Entire Agreement. The Parties acknowledge and agree that this Agreement represents the entire agreement between the Parties. In the event that the Parties desire to change, add, or otherwise modify any terms, they shall do so in writing to be signed by both parties.
Severability. In the event any provision of this Agreement is deemed invalid or unenforceable, in whole or in part, that part shall be severed from the remainder of the Agreement and all other provisions shall continue in full force and effect as valid and enforceable.
Notices. All notices under this Agreement must be sent by e-email with return receipt requested or certified or registered mail with return receipt requested.

All Notices shall be sent as follows:

Client

______________________________

Marketer

______________________________

[Remainder of this page intentionally left blank. Signature page follows.]

The Parties agree to the terms and conditions set forth above as demonstrated by their signatures as follows: