Trying to negotiate a digital marketing contract isn’t easy. This post is for the many businesses, marketing executives, traditional media agencies, and business owners who attempt to negotiate digital marketing contracts without the help of a digital marketing agency. Here are some things to consider. Businesses that buy digital marketing products and services often may not do it right. While some faults fall on the business’s shoulders regarding preparation and over-confidence, digital marketing as an industry is still evolving. Thus, there is a demand for the latest and greatest to achieve a competitive edge. Unfortunately, this mindset has led to the fall of many businesses that were promised something they never actually received. This blog post is dedicated to helping you make better digital marketing decisions when the time comes.
Digital Marketing Goals and Shiny Objects…
When the latest and greatest shiny digital marketing object crosses the desk of business owners and marketing executives, many fail to consider their goals. Every digital marketing channel (tactic) fits into your goal funnel. For instance, to increase inbound calls, you should look at channels that can reach consumers in their intent phase within the funnel. If a consumer needs a service or product, they will most likely look for it online; thus, solutions like SEM and SEO are the most common tactics. The calls come in, and everyone is happy.
However, you get “that” phone call, and it goes something like this: “Our company owns a piece of proprietary technology that can specifically target your customer online and increase your sales by 1,000%, and we are only going to work with one company in X vertical, when can you meet?” Next thing you know, a large digital marketing contract is on your desk for targeted display advertising on a popular programmatic network. The promise of increasing your business by 1,000% has become your new goal, and you become eager to buy. STOP!
Targeted display advertising is display advertising, and it doesn’t necessarily capture consumer intent no matter how much some say it does (Push vs. Pull). Display advertising builds awareness and plays more of an assist interaction versus the last interaction. Therefore, all things being said, it would be tough to increase your business by 1,000% measurably. Furthermore, buying display ads via CPM is outdated. CPM doesn’t guarantee your ad will even be seen. Savvy buyers buy on viewable CPM (vCPM) or cost per click (CPC).
What is Your Digital Marketing Management Fee?
Many businesses forget to ask this question. The opportunity blinds them, “What is your management fee?” It doesn’t matter if you are buying CPM, vCPM, or CPC; every digital marketing company (especially the big media companies) has a management fee, and they bury them in the not-so-viewable CPM or CPC. Is that a 100%-200% markup? Most of the time, it’s more than 100% because most media companies resell products, so there are two markups in the campaign. Note that the media company will only negotiate on their markup. Most of the time, you can get very aggressive in your negotiations, and don’t worry if the deal doesn’t work out. Ultimately, your digital marketing campaign will only be as good as the person running it, and a 30% to +100% markup is not worth it. If display advertising is the product, ensure viability by requesting a vCPM or CPC and avoid CPM.
Long-term Digital Marketing Contracts
Many proposals include long-term contracts, which can be labeled optimization periods and are often unnecessary. There is nothing wrong with requesting a month-to-month agreement with a 30-day cancellation clause. The last thing you want to do is try a new product at $10,000 per month with a 90-day contract to realize within 15 days that the product does not work for your business. Better yet, if the media company is so confident about its product and services, what does it have to lose if the contract is month-to-month? Nothing! If it works, you’ll keep buying.
Don’t Bother Asking for Referrals and/or Case Studies Unless…
I’ve heard it a million times, “Can you send us some referrals or case studies, please?” If you are using this line to get something practical to help you decide. Stop! They will only provide you with their “best” case study or connect you with their “best” client. The truth is, your business and budgets are different than even your nearest competitors’, as well as your definition of a conversion. However, using this phrase to buy more time in a high-pressure sales negotiation is well played.
Conclusion
Better Prepared to Negotiate A Digital Marketing Contract
Understanding the following areas above will make you a better digital marketing contract negotiator. Remember this: a wrong decision might not kill your company and/or career, but it can hurt it. Always take some time and prepare for the negotiation. Ask good questions about conversions and controls at the foundation of their promises and examples. Lastly, do not feel pressured to buy on the spot. Hiring the right company to help you with your digital marketing and advertising is very important. This is for sure, they should be your partner, not just another vendor. You may contact our advertising agency if you have any questions.
