//MOST COMMON PAYMENT TERMS OF ADVERTISING AGENCIES

MOST COMMON PAYMENT TERMS OF ADVERTISING AGENCIES

business advertising payment terms

Are you curious about the business advertising payment terms used by top advertising agencies out there? As a business owner, you should know when and how much to pay an advertising agency. It is an element of knowledge that chips in the survival of business. Money makes the world go around. All businesses, big and small, allot a good budget to advertising.

The success of a company greatly depends on its marketing and advertising efforts. If you have questions like how does an ad agency charge, keep reading. The business advertising payment terms mentioned below are applicable majorly for top agencies in the business and not for small establishments or freelancers.

First things first, beware of agencies who are trying to dupe you. You, as a client, must do your research. A through background check should be done before you sign any contracts with an agency. If you are skeptical about any aspect of the agency, be sure to follow through. When it comes to the question of when to pay an ad agency, these are four modes of payments that are acceptable to the esteemed, high-performing agencies.

1. 100% advance payment MOST COMMON PAYMENT TERMS OF ADVERTISING AND MARKETING AGENCIES

1. 100% advance payment: A Common business advertising payment term

This business advertising payment term means that the payment is decided well before the project begins. And, the client has to pay the sum before the work begins. It is mainly in-use for short term, non-recurring projects that involve designing and developing. For example, a web designing agency might want full payment before delivering the website for a company.

  • Pros: When it comes to full advance payment, it is a motivating factor for the agency employees. They are more interested in the work and give full efforts to make sure the work is spotless and up to the client’s standards.
  • Cons: There is a possibility that you might be cheated or duped. Fly-by-night agencies lose interest after they receive full payment and under-deliver the work or cross deadlines. They might even cause fraud cases by disappearing with your money and not submitting the work. Thus, this payment term should be followed only with trusted agencies.

business advertising payment terms
2. 50% advance and balance on delivery

According to this business advertising payment term, the payment is received by the agency as 50% of the total, before the work begins. The other 50% is paid after the work is delivered. This method is also used for short term, non-recurring projects that involve web designing and development, etc.

  • Pros: Since the client is only paying half the payment before receiving the work, he/she has security or leverage over the company.
  • Cons: The ad agency employees might get uncaring in the project due to the reluctance of the client. Also, fraud agencies might disappear with the money without delivering the work on time.

Advance Installments as per the work MOST COMMON PAYMENT TERMS OF ADVERTISING AND MARKETING AGENCIES

3. Installments as per the work

When it comes to the question of how does an ad agency charge, some agencies prefer to take the full money in installments, as per the completion of the work. This kind of payment method is done for long-term recurrent projects like social media marketing, SEO strategy execution and so on. This way, the client has leverage over the agency. Which means, paying the money only when the work is done.

Most importantly, you should read the blog on ADVERTISING AGENCY REALTIONSHIP MATTERS.WHY DO YOU NEED TO HAVE A GOOD CONNECTION? Because, regardless of any payment mode, we all know maintaining a good relation with other parties is amenable.

  • Pros: The client has leverage over the agency.
  • Cons: Shady agencies might try to provide low quality work to receive payments. The good agencies might also get demotivated to work, if they are unsure about their payments. They might also loose their efficiency if their payment gets delayed on a regular basis.

table, numbers, black, white image

4. Monthly/ Quarterly advance charges: Key payment term in advertising business

In this particular business advertising payment term, the client pays a fixed monthly charge to the agency. And that, in exchange of long-term recurrent work. The monthly charges are generally paid in advance. Content writing is one such area where monthly/ quarterly advance charges imply.

  • Pros: It is a stable method of payment for the client as well as for the agency. Both the parties have an equal level of trust and stakes involved.
  • Cons: Only suited for long term or recurring work.

So, if you are a business owner and plan to work with an ad agency, you should know how an ad agency charges. Renowned ad agencies are transparent with their work. They might also make you sign legal documents. In any case they will be frank about their terms and conditions. Look out for fraudulent agencies who will be vague about payment methods. Before you sign any contract or hire any agency, it is vital that you decide the payment methods thoroughly. Now, you may also like to check out our other agency specific blogs to get industry-specific knowledge.

Uni Square Concepts is an advertising agency located in New Delhi, India. By initiating The Uni Square Blog, we aim to provide a comprehensive portal where readers can educate themselves about the various aspects of advertising and marketing. The articles and blogs are written by our professional team of content writers, under the guidance of senior leaders of Uni Square Concepts.