Negotiating a digital marketing contract can be a challenge for both parties. This is because there are so many issues to consider. For example, what if the digital marketing product or service does not live up to expectations? The reasons for this type of disappointment can include a lack of understanding or perhaps overconfidence about the product’s capabilities.

However, digital marketing is an industry that continues to evolve. As such, there will always be demand for the latest and trendiest tools on the market because businesses are always striving to gain a competitive advantage. Unfortunately, this approach can also result in a company’s downfall if it has put its faith in a digital product that may not deliver on its promises.

This article will explore the intricacies of a digital marketing contract. You will also learn how to use your negotiating skills. Your ultimate objective is to purchase a superior product or service at the lowest possible price.    

marketing contract essentials

Basics of a digital marketing agreement

First of all, what is a contract? Well, it’s an agreement that contains an offer, an acceptance, a meeting of minds which can result in a legal relationship and an exchange of something of value. You must evaluate all your contracts because they will have a significant impact on your business.

Digital marketing agreements are contracts that stipulate that both parties must come to an understanding regarding a particular transaction or service. A marketing agreement is essential in situations such as:

  • Hiring a marketing professional or company to promote your products and services
  • Acknowledging your rights and obligations as a marketing professional or company in promoting a client’s products and services
  • Presenting a brand in a way that matches a client’s vision

The contract should incorporate the guidelines of your marketing agreement, including:

  • Terms of payment
  • Billable work
  • Non-compete provisions

The essential details to include in your digital marketing contract

details of a marketing contract

A digital marketing agreement may contain various sections but it should always cover the following areas:

  • Definition – This section will identify the parties and define any key terms used in the contract.
  • Considerations – Late fees, service fees or taxes are regular elements of digital marketing services. Often, it is the vendor who handles them.
  • Failure to provide crucial information – This clause will require customers to provide the digital marketing firm with information that will make the service a success. It will also set out the consequences for failing to do so. 
  • Fees and expenses – Here, the invoicing procedures, payment terms and consulting fees are explained. There must also be a provision on what could be considered to be an expense and how it should be accounted for.
  • Records – This section will specify which files are needed for safekeeping and who is in charge of this task.
  • Relationship of the contracting parties – The vendor, the contractor and the customer must all be defined in the agreement.
  • Proprietary information – This section explains how intellectual property will be protected.
  • Services – You must set out the details of the type of products and services you will be offering. You should also include the terms and conditions, restrictions, obligations, responsibilities and the relevant laws that apply.
  • Termination – You need to specify the length of the contract. In addition, if it is terminated, what will happen?

The critical sections of your digital marketing agreement

No contracts are ever the same. However, there are some features of a digital marketing agreement that should always be included. Remember, the signatories need to be reminded of their responsibilities and obligations.

  • Compensation – How is payment made for the digital marketing products and services? For example, will the payment be regular or per milestone?
  • Cancellation – Is it possible to cancel the contract and if so what are the requirements?
  • Indemnification – This section should include provisions on copyright infringement etc.
  • Intellectual property – Who retains ownership rights over the intellectual property and what is covered?
  • Governing rules and laws – If any legal disputes arise, which national or local laws will apply to the agreement?
  • Renewal – Is the contract renewable and how does this process work?
  • Dispute resolution – If a breach of contract occurs, will a third party be required to settle the dispute? What is the procedure for such a scenario?
  • Products and services – What marketing products and services will be provided according to the terms of the contract?
  • Terms – How long will the contract last?
  • Warranties – What guarantees will the vendor provide?

As change is inevitable in any industry, including the digital marketing domain, you need to incorporate provisions that will deal with any unexpected events. 

Understand your goals

Remember, contracts are mutual agreements that may have legal and financial ramifications. As such, you need to ensure that the terms and conditions will not place your business at a disadvantage.

Often, business owners and marketing people are excited about using the latest and most popular digital marketing tools. However, this can also cause them to overlook the objective of the agreement. Every marketing channel and strategy should conform to your goal funnel. For example, increasing inbound calls may require you to reach out to potential customers during the intent phase of the funnel. If your target customers are searching for your products and services, then in all likelihood they will be doing so online.

Points to remember when negotiating a digital marketing contract

  1. Make sure that the people you are dealing with have the authority to act, especially if they are not a director or a CEO. You may need to conduct some research into the party you are negotiating with. Even if it is a simple marketing agreement, you should never take anything for granted because it will certainly carry a legal risk for your company. Understanding the legal capacity of each party is the best way to protect your business interests.
  2. Some of the information discussed in the early rounds of negotiations may be considered confidential by the client. However, you may still need to disclose some of this information. It is therefore crucial that you inform the client first before divulging any sensitive details.     
  3. Ensure that the terms of the agreement are clear to all parties. Don’t include phrases that could be open to several interpretations. Anything that doesn’t appear clear needs to be addressed with the client before the contract is signed.   

Determine the management fee

This is an issue ignored by many businesses as often the focus is on the promise of attracting new customers and increasing sales. As a result, the management fee is generally forgotten about even though it is a critical aspect of the contract that should never be overlooked.

There are several payment options, such as:

  • Partial payment for every milestone achieved
  • Payment for every individual project completed
  • Periodic payments – weekly or monthly

Be careful with long-term contracts

Consider the proposals included in your long-term contracts very carefully. As mentioned earlier, change is a constant presence in any business. Terms that are advantageous now can easily become a burden in a year or two. Therefore, it’s much better to negotiate for shorter periods unless the terms allow for adjustment for any fluctuations, such as periods of high and low demand.

If the digital marketing firm is confident about its products and services, a monthly contract will still generate revenue. If it is providing you with customers and profits, you will keep renewing.       

Create an original contract, don’t copy

There are numerous templates for digital marketing contracts available online. However, there are serious legal risks involved in borrowing terms and conditions that you don’t understand. These dangers include:

  • The contract you “borrowed” may contain terms that favour your clients more than your company, thereby putting you at a disadvantage.
  • If you don’t have legal consent to use the contract that you have downloaded or copy-pasted, you may find yourself in trouble for violating intellectual property rights. 
  • The terms and conditions of the “borrowed” agreement may only be legally enforceable in a specific location; they may not work for your company because your country of residence has a different set of laws.

Conclusion

When drafting a digital marketing contract, it is imperative that you understand and stick to your ultimate goal as this will enable you to become a wiser and smarter negotiator. Negotiations of this magnitude are often complicated.

Although a wrong decision may not completely ruin your career or your company’s future, it can hamper it. Don’t rush into the dialogue and take time to prepare. Ask critical questions about issues such as conversions and controls.

What is the basis of their promise and what examples or results data can be provided? Don’t let people pressure you into buying a digital product without giving you the opportunity to consider all the angles. You should also hire the services of a company that has expertise in this area to boost your digital marketing and advertising campaign. Don’t forget that you are trying to persuade a partner to join you, not another vendor.