Marketing Partnership Agreement: What You Need to Know
A marketing partnership agreement is created when two companies are in collaboration to promote the efforts of a co-branded offer.3 min read
A marketing partnership agreement is created when two companies are in collaboration to promote the efforts of a co-branded offer. Both companies are responsible for sharing the work involved in the promotion and for sharing in the results.
Planning a Marketing Partnership Agreement
When writing up the agreement, these are some of the basic areas to cover:
- The topic or theme of the promotion.
- The timeline for the marketing project.
- The goals each partner has for the promotion.
- The obligations of each company.
- Who is creating what and who owns the assets being created.
- Where the products or services will be marketed.
- How leads to potential customers will be handled.
- A timeframe for the promotion.
- An outline of the marketing plan.
- A clear confidentiality clause.
- Any other legal clauses necessary.
If people from both companies will be involved, make the entire process more efficient by assigning each person to a task they are most prepared or experienced to do.
Overview of Co-Marketing Agreement
When a marketing partnership agreement is in place, it provides protection for both companies by clearly outlining the terms of the agreement in order to avoid any misunderstandings.
A partnership agreement is a clarifying contract that states the steps or processes the two companies will take to exchange products or materials and to provide the training tools necessary to market each other's products or services. This may include joint marketing, promotions, and sales events.
Marketing partnership agreements are also referred to as cooperative marketing agreements or joint marketing agreements.
Benefits of a Marketing Partnership Agreement
Several benefits result from a co-partnership agreement. For example:
- A significant benefit to this type of agreement is the savings both businesses enjoy related to advertising costs. The cost of marketing and advertising for events and promotions is shared by each enterprise.
- There is no confusion about payment provisions with an agreement in place. It also allows each business to clarify its marketing territory, the manner in which disputes will be handled, and other areas they want to be clarified in the agreement.
- Each marketing partner will receive a percentage of the total direct sales of products or services of the other partner. Each will also receive a percentage of sales made attributed to the marketing of those products and services.
- There may also be opportunities for revenue sharing and commission.
- Branding is an important aspect of any business, and with a marketing agreement between two businesses, it helps get products in front of a new audience in an effort to build and expand a customer base.
- If you partner with a company with the same or similar products or services, both businesses benefit from marketing and promotion. With this in mind, it is a good idea to co-market with a business with the same purpose and goal that results in benefits to both businesses.
- With a marketing partner, you may have access to a team of people who can work together to create, promote, share, and market ideas.
Things to Consider
In the agreement, everything pertaining to the relationship between the partners in terms of partner offers, logo/banner/signage placement, sales metrics, and ownership of the end customer buying the product should be stated.
Although some businesses may not feel an agreement is necessary, it is for the benefit of both parties to have one written and signed by both parties. As with any agreement, it is recommended to only sign an agreement with a company you trust and want to have a marketing partnership with.
While agreements are important, it is up to the two partners whether it will be detailed and complex or simply covers the basics.
There are many formats for marketing. The following are examples of how partners can promote goods and services:
- Blog posts.
- Social media (i.e., Twitter, Facebook, and Instagram).
- Online and offline events.
An example of when a marketing partnership agreement is utilized is when one business is interested in placing products in another the store or storefront of another business to promote and increase sales. Another example is a joint marketing campaign or sale that benefits both businesses.
If you need help with a marketing partnership agreement, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.