Guide

Work with an advertising agency

Negotiate a contract with an advertising agency

When you have chosen an advertising agency, it's good business practice to negotiate and sign a detailed contract with them. Before you do this you should be clear about what you want from the deal. Many agencies have their own pro-forma agreements that you can adapt to your needs.

Length of contract

Ask yourself whether you want a contract for a short period, allowing for a one-off campaign, or whether it's better to prepare for a longer-lasting relationship. You could opt for a year-long contract allowing the agency to create an overall strategy. Consider including a probation period to allow for an early termination if necessary.

Agreeing campaign details and schedules

Your contract should then outline the nature of campaigns to be undertaken, as well as any other work, such as media buying, that the agency is expected to do. It should detail any campaign schedules to which the agency will work. You should also clarify who will own the intellectual property in any work that you commission. This is particularly important where it involves the design of an advertisement or logo, for example.

Agreeing objectives

You should agree objectives and how you will evaluate campaigns - for example by measuring sales or carrying out market research. You might want to set measurable benchmarks. You should also agree a procedure to address any situation where either party is unhappy or wants to end the agreement. Read more about how to end your relationship with an advertising agency.

Setting payment terms

You should make sure you know exactly how the agency will calculate its charges. For example, will there be additional expenses and does it include fees for buying media space? Sometimes you can agree a payment-by-results system. Also, check if there will be any extra charges for meetings and brainstorming sessions.

Building in safety measures

Any contract should include confidentiality clauses.

It should also prepare for either side wanting to end the agreement by:

  • specifying the notice period each party must give and whether the agency will be entitled to notice payment
  • detailing the obligations on both parties during the notice period
  • determining who owns copyright in the work created for your business