How to Negotiate a Facebook Ads Management Contract with an Ad Agency

Follow These Simple Steps to Create Ads Management Deal that Works for Both You and Your Agency.

In one of my earlier posts about How to Use a Facebook Ads Audit to Convert Prospective Clients  I pointed out  that some clients get so excited by what agencies have shown them, they stop you, partway through the audit and ask how much it costs to work with your digital marketing agency. Today I want to talk about what e-commerce companies need to do to avoid jumping the gun by critically evaluating audits and agency proposals. 

As an e-commerce company, you want to make sure the basket you’re putting your eggs in is the best one out there. To help you with this advanced prep work, I’ll walk you through the nine main parts that will be included in a proposal and contract.  And then I’ll give you one last killer way to make sure you’re making the most of your ad spend no matter which agency you choose.

Part 1. Consider the List of Services You’ll Need

A standard Facebook Ads Management proposal and contract would include:

  • A paid advertising strategy call with the client to discuss ad campaign and strategy.

  • Competitor market research (e.g., Where are competitors running ads? What type of ads are they running? Etc.).

  • Identifying persona models (aka avatars).

  • Regular split-testing of ad copy and creatives to determine “winners” and increase the profitability of ad performance.

  • Setting up and monitoring basic and advanced tracking for on- and offline events.

  • Weekly reporting, including details of campaign performance and recommendations.

  • Overall ad campaign management from start to finish.

Additional services you might want to have then provide includes:

  • Automated Email Sequences

  • Webinar or Launch Funnels

  • Messenger Bot Funnels

  • Multi-tier Advertising Strategy

  • Content Marketing Calendars

  • Landing Page Design & Build

  • Website Optimization

  • Community Management

  • Reputation and Reviews Management

Now that you have an idea of what services you might want to have, it’s time to talk about what you might (or should) expect to pay.  Options we’ll talk about include monthly retainers, setup fees, and performance-based compensation.

Part 2.  Paying for Agency Services

Monthly Retainers

Pricing can be one of the trickiest things to figure out when you’re contracting for  Facebook ad management services. If you’re working with an agency that’s just starting out, you might be able to negotiate a lower amount (around $1k/month) in exchange for testimonials and case studies.  If you’re talking to an agency with a long track record of success expect to pay $5000+ per month or more.

Setup Fees

Along with a monthly retainer, you’ll probably have to pay a setup fee. This covers the time the agency will spend onboarding your account, attending strategy sessions, and gathering all the assets.

The setup fee is usually equivalent to one month’s retainer. If the agency will be charging $5k/month for Facebook ad management, then they will probably ask for a  $5k setup fee. Depending on the complexity of your business it could be more or less.

If you’re inclined to negotiate, you can ask for a lower setup fee. Your agency may even agree to remove it entirely depending on what you are actually going to need and what system(s) you already have in place.  

Just be aware that some agencies will consider hardball negotiating on price as a red flag.  So if they have a great reputation and you really want to work with them, you may want to tread lightly on that front. 

Performance-Based Compensation

If you’re a high-paying client, some agencies might suggest charging you a percentage of monthly ad spend instead of a monthly retainer fee. For example…

Once $50,000 in monthly ad spend has been reached, your company might agree to pay a management fee based on a percentage of the total monthly ad spend, in lieu of the monthly base retainer.

This is important: Agencies who ask for performance compensation will want it to be  based on ad spend, not revenue. The reason behind that is that the higher the ad spend, the more work it will be for the agency to manage your accounts.

Part 3. Payment

Savvy agencies will ask you to collect payment prior to starting work.  And there are good reasons for that.

Facebook ads management is only a small piece of the puzzle when it comes to your company seeing a return on ad spend (ROAS). Remember that the agency has little control over how quickly you follow up with leads, how great you are at closing sales or your overall reputation.

You might get 50 high-quality leads a day, but if you’re are unable to close the sale, don’t blame the agency. This is why agencies charge for the work they perform upfront 

In the proposal, you’ll want to have the agency spell out the following:

  • Monthly retainer fee and due dates

  • Additional fees the client is responsible for (taxes, late payments, third-party services, etc.)

  • How payments will be made (auto-draft, check, direct deposit, etc.)

Part 4. The Scope of Work

Once you know which services you will need and how much they will cost, it’s time to lay out the details into a defined scope of work. In doing so you and your agency will be able to keep the focus of the project and the lines of communication open.

In addition, it’s incredibly important for you and your agency to know exactly what’s included in the monthly retainer, as well as what’s not included by listing out the prices for all other services that are considered out of scope.

Here’s an example of Scope of Work for Facebook Ads Management:

  • Upload existing customer data and develop lookalike audiences pools

  • Leverage Facebook’s affinity analysis tool to build target segments

  • Create two Facebook ad campaigns with ad copy/creatives (excluding video production)

  • Create retargeting audience pools

  • Daily optimization of bids, budgets, audiences, and creatives

All other work should be billed at an hourly rate and approved by your company, prior to services being performed.

Part 5. Termination

Creating a termination clause allows both parties to end the relationship if it’s not working out as expected. It usually includes language referencing 30 to 60 day written notice of the desire to cancel services.

This will give your agency time to:

  • Wrap up any campaigns that are currently running.

  • Offboarding and passing your account on to another agency, if necessary.

This will give you the opportunity to:

  • Find a new Facebook ads agency.

  • Prepare your team for a potential fluctuation in sales and leads.

  • Brainstorm ideas, if you want to move in a different direction.

Be aware that if your company wants to terminate the relationship early, this clause allows the agency to collect any payments still owed on their original contract.

Part 6. Ownership of Materials

This is a simple, but powerful addition to any Facebook ad management proposal or contract.

Simply put, it defines who owns what.

In most cases, your company will be named the sole owner of all assets and materials used.

Since you are paying the agency to create ads, copy, and creatives, it’s only fair that you would become the owners of those assets, but only after the agency has received payment.

Your agency might also want to include a line or two that allows them to keep a copy of the assets and use them for their marketing and promotional needs. For example, your agency could display the ad, ad copy, and associated metrics in a case study, white paper, or even in a blog post.

Just make sure there won’t be any negative outcomes or privacy issues for you or your agency when doing so. If you do, make sure your agency gives proper credit to you as the owner of any used materials.

Part 7. Client Agreements

In order for your agency to do an outstanding job, it’s imperative that your company provides access to any and all relevant information.

Outlining what your company agrees to provide saves you both time and money.  Because keeps the agency from having to track down assets necessary to create a winning campaign.

For example, your agency might request:

  • Details describing your company’s market/buyer.

  • All product-based assets, including lead magnet(s), liquidating offers, upsells/downsells, webinar offers, bundles, etc.

  • Detailed metrics on which funnel(s) and traffic source(s) are currently working in your company’s business.

Providing that information will help your agency create the most effective campaigns possible.  This section works to ensure everyone is on the same page and all necessary information is received in a timely manner.

At this point you have all the nuts and bolts in place, so we’ll now turn to the legal clauses; arguably the most important parts of the proposal.

Part 8. Legal Clauses

Most people don’t read these clauses, but they can become invaluable if you ever have a problem dealing with your agency.. They keep everyone honest if a conflict ever arises.

Here are some sections to consider:

  • Non-interference: This comes down to “We won’t steal your people and you won’t steal ours.” Some companies do an end run-around their agency and try to hire their freelancers or employees to do your job for them. Including this clause with an additional, “If you do steal one of our people, the agency will fine your company for one year of their salary” will likely make you think twice about poaching their people.

  • Non-disclosure: Your agency must promise to protect your company’s private information. However, your agency will probably want to be able to use the results they get for case studies to promote their own business. This clause should make it clear that while your agency will have the right to use your company’s campaign information as part of a case study, they won’t ever reveal any of their private information or secret tactics. You’ll grant them the right to use your logo, pictures, or information that highlights the work they’ve done for you

Liability Limitations: This is a statement that protects the agency if something goes wrong, like:

  • A split test lowers your conversion rate.

  • They go over budget for one month.

  • Your target audience doesn’t respond as expected.

  • Severability: A provision in a contract that states that if parts of the contract are held to be illegal or otherwise unenforceable, the remainder of the contract should still apply.

  • Force Majeure: This relieves the parties from performing their contractual obligations when certain circumstances beyond their control arise, making performance inadvisable, commercially impracticable, illegal, or impossible.

  • Indemnification:  This covers compensation for damages or loss, and in the legal sense, it may also refer to an exemption from liability for damages. For the agency,  this means if your company experiences a substantial loss from the Facebook ad campaign they run, they are not liable for that loss.

  • Confidentiality: Where your agency agrees not to divulge any of your protected company information and you agree to the same for them.

We must note that nothing here should be construed as legal advice. We strongly recommend that you run any proposal and contract documents by an attorney before using them to draw up an agreement with an agency.

You Have What You Need to Negotiate a Facebook Ad Management Proposal

To get an idea of what kind of a proposal an agency might present you with, check out this template as a basic reference.  The more you know, the better prepared you’ll be to negotiate a Facebook Ad Management Contrac that works for both of you.

But Wait, There' More:  

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Until everyone else discovers it, it’s basically a secret weapon’s grade financial services tool your company can use to gain a huge competitive advantage in acquiring new customers and scale to the moon.

A Purpose-Built Card that Gives E-commerce Companies an Insane Financial Advantage

The dash.fi offers flexible card authorizations, underwriting, and statement cycles to streamline digital ad payments for scaling global brands.

That means you can scale spend faster and easier across ad accounts with more stability than ever before, thanks to:

  • 10-20x higher daily spend limits

  • Underwriting based on ad performance & campaign payment history

  • Multiple card #’s (i.e. one per media partner) 

  • Proprietary insights/access (ie best media buyers) 

  • Custom statement cycles to match payback periods 

Learn more about dash.fi now.  Apply in minutes.


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