What Is an Advertising Agency Retainer Agreement?
An Advertising Agency Retainer Agreement is a pricing agreement between the advertising agency and the client. The parties agree upon a set rate for a set period of time during which services are provided.
Creative advertising agencies and digital marketing agencies alike use these agreements. The rate is often monthly, and the advertising agency retainer agreement expresses all the services that will be covered monthly.
When to Use
When you’re looking for a long-term relationship that includes advertising, marketing, and creative services, it may be necessary to establish a rate of pay through an advertising agency retainer agreement. However, if you’re only creating a website for a client, it may make more sense to consider an independent contract instead.
Types of Advertising Agency Retainers
- Pay-for-Access. This is similar to a monthly subscription cost. You pay for access to the advertising agency’s services for a certain period of time, such as a month or a year. This is great for advertising agencies who take on a consulting role.
- Pay-for-Work. The client pays an hourly rate for the advertising agency’s services.
- Project-Based. The client pays the advertising agency a flat rate for each project. They may pay half up front and half after services are rendered, or the entire amount after services are rendered.
Benefits of Using an Advertising Agency Retainer
An advertising agency retainer agreement is a handy document to have drafted if you hope to have regular clients. You may be able to work out a one-time agreement for one-off clients, but the goal is to build a base of clients who keep coming back. For these ongoing relationships, having a document laying out the ongoing terms is easier.
A retainer agreement also offers greater security. If the client fails to pay or tries to claim that they should not have to pay, your retainer agreement can hold them to what they legally agreed.
How to Write an Advertising Agency Retainer
Every advertising agency retainer agreement should begin by listing the parties involved in the agreement and the date on which the agreement is made. This is generally your first paragraph. What follows may vary depending on your needs. Commonly, it will include:
1. Scope of Services
Describe the type of advertising that your agency will provide to the client. You will have space for a small paragraph here, but you can attach an exhibit to provide further detail concerning the scope of services.
2. Fees
This section describes the fees you will be owed in exchange for services, when they should be paid, and whether they are refundable. You can also use this section to explain what those fees cover. You should also include a “replenishment of retainer” section that discusses what should happen once the initial retainer fee has been deducted — whether the agency or the client replenishes that or whether it is depleted.
3. Term and Termination
State the period of time over which the services will be provided. You should also cover termination by explaining the conditions under which the relationship should be terminated — generally after a set period or once services are completed.
4. Confidentiality
You may need to agree to confidentiality. The client agrees not to disclose sensitive details about your business, and you agree not to disclose sensitive information about the client.
5. Governing Law, Disputes, and Severability
Reference the law under which the contract is applicable, whether federal, state, regional, or other. In case the contract is defaulted by either party, there should be a section on severability to discuss severing the agreement. You should also include a section on how any disputes in the working relationship are to be settled.
Following these sections, all parties involved should sign their names, record the current date, and add any exhibits.
Advertising Agency Retainer Agreement Sample
