Want to learn more about drafting, negotiating, and understanding intellectual property and technology contracts, and have 10 minutes to spare? Grab your morning coffee or afternoon tea and dig into our Tech Contract Quick Bytes—small servings of technical contract insights expertly prepared by our seasoned attorneys. This month, we're dishing up best practices for advertising agreements.
Businesses often hire advertising agencies to assist with their marketing and promotion efforts. This outsourcing model has gained popularity with the emergence of online, social media, and mobile advertising.
While this approach to online advertising has many benefits, businesses must ensure that their advertising contracts with advertising agencies contain key provisions that will mitigate certain legal risks, bearing in mind that the business itself is the party that is likely to be sued if a third party objects to the contents of the advertising. The following best practices can help businesses limit risk when outsourcing marketing campaigns.
- Define which party owns the IP rights to the content or data used or developed by the advertising agency to create the advertisement(s) and limit the use of any proprietary content or data
- Bind the agency to confidentiality obligations relating to the business's proprietary business information
- Provide the business with the right to control the use of search engine optimization practices or seek a disclaimer of any responsibility (and a corresponding limit to liability) for the agency's actions
- Require the agency to obtain consent to use third-party intellectual property in the advertising campaign
- Require the agency to follow applicable laws and industry best practices relating to data collection and use
- Require the agency to conform to all applicable privacy laws (including new U.S. state laws) and best practices relating to online advertising, data processing, and data collection/use, including those associated with intent-based advertising, data sales, and transfers, and laws designed to protect the privacy of children
- Consider required consumer consents (opt-in or opt-out), notices, or acknowledgments for data collection, sharing, or use
- Require the agency to follow all applicable advertising laws, such as those relating to comparative advertisements and any industry‑specific rules or recommended practices
Standard Contract Provisions
- Make it clear that there is no agency relationship between the parties
- Clearly define the scope of work (including the deliverables to be provided and the schedule), payment obligations, contract duration, and termination rights
- Require the agency to indemnify the business for any third-party claims and require that the agency have the necessary insurance policies to cover potential third-party claims
- Require that an agency's contracts with subcontractors or other media companies contain provisions that incorporate and account for the concepts mentioned above
If you or your company would like to talk about marketing technology, please contact A.J. Zottola. Click here to learn more about Venable's IP Tech Transactions services, and subscribe to Tech Contract Quick Bytes.