How to Draft an Advertising Agency Agreement
Title the document., Format the document as a business letter., Insert an introduction., Outline the scope of your work., Agree not to handle competing products., Explain how your fees will be calculated., Remember to mention costs., State when fees...
Step-by-Step Guide
-
Step 1: Title the document.
If you want, you can include the title “Advertising Agency/Client Agreement” at the top, in all caps so that it stands out.You could also put it in a slightly larger font than the rest of the text. -
Step 2: Format the document as a business letter.
You should address the letter to the appropriate employee, such as the client’s president or CEO.
You should have talked ahead of time about the terms of your engagement, so the letter can memorialize your agreement.
Insert the date and then the name and address of the client in a signature block.
Open the letter with a salutation such as “Dear :”., Open the letter with basic pleasantries, stating how happy you are to have been chosen at the client’s advertising agency.
Also explain that the letter of agreement is based on discussions that you have had.
Sample language could read, “We are pleased you have chosen us as your advertising agency on your project.
We are excited to start and are sending this letter of agreement to you for the project.”, In as much detail as possible, you should list what tasks you will perform for the client.
You can list them in a numbered format.
You might agree to do the following:formulate and submit for client approval advertising campaigns plan media commitments consistent with budgets set by the client purchase all materials and services necessary for the production of advertisements and commercials order advertising space and time check to make sure that advertising appears properly pay all charges incurred and assumed by the advertising agency on the client’s behalf strive to do the work in the most cost-effective manner possible , The client might want you to promise that you won’t create advertising for products that directly compete with the client’s product.
In addition, the client might want you to avoid creating advertisements for products in the same category, such as cosmetics or automobiles.
In this situation, you would include a provision agreeing not to create ads for competing goods or companies., You have several options for calculating fees, which you should have discussed with the client ahead of time.
For example, you might decide to bill using the following methods:
Monthly fee.
The client will agree to pay you a monthly fee.
You should state when the fee must be paid, such as the first of the month for services rendered that month.A flat-fee.
You might estimate ahead of time how much to charge and then charge only that amount in fees.
If you end up spending more time, then you have to eat the loss., As you create the advertisements, you will need to buy materials or supplies.
For example, you will need to reserve advertising time on television, which will require that you pay fees.
You may also need to buy art supplies or pay models to pose for advertisements.
You should mention in your agreement that your fee does not cover these “out of pocket” expenses.
You could write, “Our fees cover only the agency’s time.
We will bill all out-of-pocket costs to you at cost.”, You might want the client to pay your fees in advance, before you start work.
You also should state when out-of-pocket costs should be paid.
For example, you could write, “You must pay all fees in advance before we commence work.
Additionally, any out-of-pocket costs must be paid on the vendor’s terms.
We will submit out-of-pocket costs to you for approval before beginning work., The client might want you to defend it in the event the advertising you create subjects it to a lawsuit.
For example, you could inadvertently include an unauthorized celebrity endorsement in an ad or infringe on someone’s copyright as you create the visuals for an ad campaign.
An indemnification clause is your agreement to defend the client in the event of a lawsuit.
A sample clause might read: “We agree to assume liability for the content of our advertisement and any claim arising from such publication, including claims for invasion of privacy, libel, copyright infringement, trademark infringement, commercial appropriation of someone’s name or likeness, commercial defamation, false advertising, or any other claim based in contract or tort.
In addition, we will defend and hold you harmless from all claims, judgments, lawsuits, damages, losses, liabilities, costs and expenses (including reasonable attorneys’ fees) resulting from or caused by the advertisement.”, End the letter in a friendly way.
State that you are excited to begin working on the project and ask the client to contact you with any questions.
You could write, “We are thrilled to be working with you and hope you agree to these terms and fees.
If so, then please sign this agreement below and return the original to us.
If you have any questions, feel free to call me at your convenience.”, Write “Best Regards” or “Warmest Regards” and then include your signature.
Also add your name and title underneath your signature., Just above the client’s signature line, type: “Terms Accepted.” Then put the client’s name, title, and company name beneath the signature line., Send the agreement certified mail, return receipt requested.
If you don’t hear back within a reasonable amount of time, then you should call the client to follow-up.
Once you get the signed agreement back, make a copy and send it to the client. -
Step 3: Insert an introduction.
-
Step 4: Outline the scope of your work.
-
Step 5: Agree not to handle competing products.
-
Step 6: Explain how your fees will be calculated.
-
Step 7: Remember to mention costs.
-
Step 8: State when fees must be paid.
-
Step 9: Think about including an indemnification clause.
-
Step 10: Tell the client to contact you with questions.
-
Step 11: Include your signature.
-
Step 12: Add a signature line for the client.
-
Step 13: Mail the agreement.
Detailed Guide
If you want, you can include the title “Advertising Agency/Client Agreement” at the top, in all caps so that it stands out.You could also put it in a slightly larger font than the rest of the text.
You should address the letter to the appropriate employee, such as the client’s president or CEO.
You should have talked ahead of time about the terms of your engagement, so the letter can memorialize your agreement.
Insert the date and then the name and address of the client in a signature block.
Open the letter with a salutation such as “Dear :”., Open the letter with basic pleasantries, stating how happy you are to have been chosen at the client’s advertising agency.
Also explain that the letter of agreement is based on discussions that you have had.
Sample language could read, “We are pleased you have chosen us as your advertising agency on your project.
We are excited to start and are sending this letter of agreement to you for the project.”, In as much detail as possible, you should list what tasks you will perform for the client.
You can list them in a numbered format.
You might agree to do the following:formulate and submit for client approval advertising campaigns plan media commitments consistent with budgets set by the client purchase all materials and services necessary for the production of advertisements and commercials order advertising space and time check to make sure that advertising appears properly pay all charges incurred and assumed by the advertising agency on the client’s behalf strive to do the work in the most cost-effective manner possible , The client might want you to promise that you won’t create advertising for products that directly compete with the client’s product.
In addition, the client might want you to avoid creating advertisements for products in the same category, such as cosmetics or automobiles.
In this situation, you would include a provision agreeing not to create ads for competing goods or companies., You have several options for calculating fees, which you should have discussed with the client ahead of time.
For example, you might decide to bill using the following methods:
Monthly fee.
The client will agree to pay you a monthly fee.
You should state when the fee must be paid, such as the first of the month for services rendered that month.A flat-fee.
You might estimate ahead of time how much to charge and then charge only that amount in fees.
If you end up spending more time, then you have to eat the loss., As you create the advertisements, you will need to buy materials or supplies.
For example, you will need to reserve advertising time on television, which will require that you pay fees.
You may also need to buy art supplies or pay models to pose for advertisements.
You should mention in your agreement that your fee does not cover these “out of pocket” expenses.
You could write, “Our fees cover only the agency’s time.
We will bill all out-of-pocket costs to you at cost.”, You might want the client to pay your fees in advance, before you start work.
You also should state when out-of-pocket costs should be paid.
For example, you could write, “You must pay all fees in advance before we commence work.
Additionally, any out-of-pocket costs must be paid on the vendor’s terms.
We will submit out-of-pocket costs to you for approval before beginning work., The client might want you to defend it in the event the advertising you create subjects it to a lawsuit.
For example, you could inadvertently include an unauthorized celebrity endorsement in an ad or infringe on someone’s copyright as you create the visuals for an ad campaign.
An indemnification clause is your agreement to defend the client in the event of a lawsuit.
A sample clause might read: “We agree to assume liability for the content of our advertisement and any claim arising from such publication, including claims for invasion of privacy, libel, copyright infringement, trademark infringement, commercial appropriation of someone’s name or likeness, commercial defamation, false advertising, or any other claim based in contract or tort.
In addition, we will defend and hold you harmless from all claims, judgments, lawsuits, damages, losses, liabilities, costs and expenses (including reasonable attorneys’ fees) resulting from or caused by the advertisement.”, End the letter in a friendly way.
State that you are excited to begin working on the project and ask the client to contact you with any questions.
You could write, “We are thrilled to be working with you and hope you agree to these terms and fees.
If so, then please sign this agreement below and return the original to us.
If you have any questions, feel free to call me at your convenience.”, Write “Best Regards” or “Warmest Regards” and then include your signature.
Also add your name and title underneath your signature., Just above the client’s signature line, type: “Terms Accepted.” Then put the client’s name, title, and company name beneath the signature line., Send the agreement certified mail, return receipt requested.
If you don’t hear back within a reasonable amount of time, then you should call the client to follow-up.
Once you get the signed agreement back, make a copy and send it to the client.
About the Author
Maria Cruz
Creates helpful guides on DIY projects to inspire and educate readers.
Rate This Guide
How helpful was this guide? Click to rate: