Advertising Partnership Agreement
An advertising partnership agreement is created when two companies collaborate to promote a co-branded offer’s efforts. Both companies are responsible for sharing the work involved in the promotion and for sharing in the results.
Meaning of an advertising partnership agreement
An advertising partnership agreement is:
- A written document that is created by one side.
- All parties involved have agreed on it.
- All marketing efforts done by the outside company or consultant are included and described.
- The scope is unambiguous.
An advertising partnership agreement, like any other business contract, explains what is anticipated of the hired marketing agency or consultant, as well as the scope of work for which they have been employed. It is a legal document that explains why a marketing agency or marketing consultant was recruited in the first place. It serves as a record of what all parties have agreed to, and it goes into detail on points such as payment, schedule, and deliverables.
It also serves as a written record that protects all parties by clarifying what is expected of whom and when. For example, because the marketing partnership agreement explicitly states the scope of the project, the company cannot fraudulently claim that the marketing agency did not keep its end of the bargain.
Planning an advertising partnership agreement
When writing up the advertising partnership agreement, these are some of the basic areas to cover:
- The topic or theme of the promotion.
- The timeline for the marketing project.
- The goals each partner has for the promotion.
- The obligations of each company.
- Who is creating what and who owns the assets being created.
- Where the products or services will be marketed.
- How leads to potential customers will be handled.
- A timeframe for the promotion.
- An outline of the marketing plan.
- A clear confidentiality clause.
- Any other legal clauses necessary.
If people from both companies will be involved, make the entire process more efficient by assigning each person to a task they are most prepared or experienced to do.
Overview of advertising partnership agreement
When an advertising partnership agreement is in place, it provides protection for both companies by clearly outlining the terms of the agreement in order to avoid any misunderstandings. An advertising partnership agreement is a clarifying contract that states the steps or processes the two companies will take to exchange products or materials and to provide the training tools necessary to market each other’s products or services. This may include joint marketing, promotions, and sales events. Advertising partnership agreements are also referred to as cooperative marketing agreements or joint marketing agreements.
Benefits of an advertising partnership agreement
Several benefits result from an advertising partnership agreement. For example:
- A significant benefit to an advertising partnership agreement is the savings both businesses enjoy related to advertising costs. The cost of marketing and advertising for events and promotions is shared by each enterprise.
- There is no confusion about payment provisions with an advertising partnership agreement in place. It also allows each business to clarify its marketing territory, the manner in which disputes will be handled, and other areas they want to be clarified in the agreement.
- Each marketing partner will receive a percentage of the total direct sales of products or services of the other partner. Each will also receive a percentage of sales made attributed to the marketing of those products and services.
- There may also be opportunities for revenue sharing and commission in an advertising partnership agreement.
- Branding is an important aspect of any business, and with an advertising partnership agreement between two businesses, it helps get products in front of a new audience in an effort to build and expand a customer base.
- If you partner with a company with the same or similar products or services, both businesses benefit from marketing and promotion. With this in mind, it is a good idea to co-market with a business with the same purpose and goal that results in benefits to both businesses.
- With a marketing partner, you may have access to a team of people who can work together to create, promote, share, and market ideas.
Things to consider when formulating an advertising partnership agreement
In the advertising partnership agreement, everything pertaining to the relationship between the partners in terms of partner offers, logo/banner/signage placement, sales metrics, and ownership of the end customer buying the product should be stated. Although some businesses may not feel an advertising partnership agreement is necessary, it is for the benefit of both parties to have one written and signed by both parties. As with any agreement, it is recommended to only sign an advertising partnership agreement with a company you trust and want to have a marketing partnership with.
While advertising partnership agreements are important, it is up to the two partners whether it will be detailed and complex or simply covers the basics. There are many formats for marketing. The following are examples of how partners can promote goods and services:
- Blog posts.
- Social media (i.e., Twitter, Facebook, and Instagram).
- Online and offline events.
An example of when an advertising partnership agreement is utilized is when one business is interested in placing products in another store or storefront of another business to promote and increase sales. Another example is a joint marketing campaign or sale that benefits both businesses.
What should an advertising partnership agreement incorporate?
An advertising partnership agreement, unlike other types of business contracts, does not have a clearly defined framework that must be followed. There will be some clauses featured in the majority of agreements, but there isn’t a specific format that all businesses utilize.
As a result, all advertising partnership agreements will include a discussion of payment conditions, timelines, and some articulation of the marketing agency’s job. There may also include a part dealing with legal issues such as copyright protection, nondisclosure, or other provisions concerning a company’s proprietary information.
An advertising partnership agreement will almost certainly include details on what parties will do if the agreement is terminated prematurely, as well as a clear outline of what success looks like so that the business can determine whether or not the marketer has accomplished what they were hired to do.
The elements of a comprehensive advertising partnership agreement
So, what exactly is a marketing partnership contract? An agreement must include the following elements to be used in business:
- Discussion of exclusivity
A contract will typically grant the marketing agency or consultant exclusive rights to undertake marketing, public relations, and so on for the business or product for the period of the deal. That is, if a small business hires a marketing agency to promote a new product, the marketing partnership agreement will state that no other marketing agencies will be involved in marketing said product for the set period. This includes precisely identifying the client (the company) and the consultant (the agency or marketer), as well as outlining the duration or scope of the project and stating that no other agency will be employed during that period.
- Timeline details
A timeframe is an essential component of every marketing arrangement. For one thing, the agency or consultant will not have exclusive rights to perform the business’s marketing indefinitely; they are most usually employed for a set period (to promote a newly launched product, service, or business, for example), or to promote a specific product or service.
As a result, a marketing partnership agreement must have a clear schedule that is agreed upon by both the client and the consultant. This is usually one to two years; however, the timetable is determined by the needs of the firm.
- Payment and cost details
What is the entire cost of hiring the agency or consultant? This is where the nuts and bolts come into play. This portion of the marketing partnership agreement should specify the total amount of payment as well as any payment structure information. As a result, this could take the form of a discussion about monthly payments, a clarification of the total amount upfront, and so on. It is essential to obtain prior written approval for payment conditions.
- Project-specific details
This is the most adaptable portion of the marketing agreement; after all, each agreement will be unique. Make a note of the facts of the project you hope to engage an outside marketing business agent to complete at the outset since you will incorporate those elements into the agreement. What kind of work are you looking for them to do? Are they creating a comprehensive advertising and marketing strategy for your entire company, or are they only marketing a single new product? What routes do you want to pursue? Do you want a well-structured social media campaign, PR outreach to local media, paid advertising, and so on?
Remember that a marketing partnership agreement is a record of your expectations, so getting on the same page in terms of what you anticipate from your selected agency provides you the best opportunity of having a satisfying working relationship.
- Timeline for completion
As mentioned earlier, you will need to explicitly outline when the various project components are due, how long you anticipate working with the agency or consultant, and any other date-specific information. So, if the project includes deliverables that must be finished by a given date, include them here, as well as the entire duration that the relationship spans (a one-year contract, two years, and so on).
- Any legal disclaimers, insurance information, confidentiality, or similar points.
Depending on your sector, various regulations may need to be addressed in your marketing agreement. There may even be a debate about taxes and who will pay what. In addition, if relevant, include any insurance details.
If your company relies on sensitive intellectual property or proprietary information, you may need to give details on how this will be handled. This may include a discussion of property ownership—that is, you may need to go into depth about who owns existing pieces of your firm, as well as who will own everything created.
You will also need a section on confidentiality if you require your contracted marketer to sign a non-disclosure agreement. This normally looks like a statement that a signed non-disclosure agreement exists, rather than the actual agreement itself, which you will have to sort out at a later date and through a different arrangement.
The benefits of having an agreement
- Accountability: There is a clear illustration of all parties’ duties.
- Clarification of scope: Everyone will understand what the project’s scope is, promoting a positive working relationship.
- Reduced danger of miscommunication: If everything has been defined upfront, you are less likely to butt heads about when payments are due or the intended outcome of the project has not been obtained.
- A written consent: If the relationship fails in the worst-case scenario, you are safeguarded by the fact that you have a record of everything that was agreed upon by all parties involved. If there is a disagreement, you can always resort to the applicable law.
The drawbacks of having an agreement
- It takes more time to reach an agreement than it does to not reach an agreement at all. Clearly, creating a marketing partnership agreement takes more time and effort than skipping the process altogether.
- Things can still fall through the cracks. While you may try to cover all of your bases, indeed, it is not always possible to protect yourself from all potential undesirable outcomes.
- Some agencies or consultants may be hesitant to sign anything so official. There may be people who object to signing what appears to be a formal contract.
Conclusion
While the drawbacks exist, they are minor when weighed against the advantages. Aside from a little amount of time spent upfront, having a marketing partnership agreement does not need significant time investment. And, while you cannot always protect yourself from every situation, having an agreement in place is still wonderful insurance against a falling out or unpleasant relationship, and will make it far more likely that everyone is on the same page and that the relationship runs smoothly. It is not structured in the same way as other types of commercial contracts. Terms and conditions vary from one company to the next, and no single format is used by all companies.
References
https://smallbusiness.chron.com
https://www.business-in-a-box.com/advertising
https://www.findresultsquickly.com/
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