Do’s and Don’ts of Crafting a PPC Contract

If you’re going to work as a PPC consultant or a freelancer (or if you are on the hiring side), you’re probably you should consider documenting your agreement in a contract.

Contracts help both parties understand the terms of your agreement, payment milestones, and protections for both parties. More importantly from a sales perspective, a contract can help you identify “out of scope” work to increase your revenue.

As you can imagine, we get a lot of questions about what type of language belongs in a PPC contract. While only an attorney can provide legal advice, I would like to share some insights I’ve gained over the years as a PPC freelancer and consultant.

DISCLAIMER

This article contains general information only and Jeffalytics is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services.

This article is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Jeffalytics shall not be responsible for any loss sustained by any person who relies on this article.

Today, I’d like to talk about some do’s, and some don’ts for PPC contracts

Now that we have the disclaimers out of the way, let’s discuss some general guidelines and considerations for PPC contracts, specifically on terms that should and shouldn’t go into a PPC service contract.

Let’s talk about PPC contracts.

Legal-eze

Remember the movie Willie Wonka? There was a part of this movie that gave me contract anxiety. About mid-way through the film, Mr. Beauregarde, Violets Dad, tells Wonka:

PPC Contracts

Ever since I first saw this movie when I was five years old, I’ve been afraid of contracts.

But, contracts are not for suckers!!

They are for smart PPC managers and business-wise clients.

PPC Contracts

Contracts help establish:

What work will be delivered, on what terms, and in what time frame. 

Timing for payment and how payments are made.

Contracts also protect your interests

New business engagements are often motivated by optimism and excitement.  But what happens when things go wrong?  Contacts exist to protect your interest when your business arrangements don’t work out.

Contract Pre-Steps

It’s much easier to work through the contract process if you already have a verbal agreement in place. This is especially true in the PPC world, where clients often have big hopes for all the new sales you’re going to bring them.

You want to work to educate your prospective partners about your PPC management process. And you want to establish fair expectations before you agree to anything in writing.

Let’s look at some pre-steps you can take to get the contract process off to a good start.

PPC Contract Pre-step #1

Be clear about your expectations up front.

You need to clearly establish what your clients are trying to achieve.  Then determine if those expectations are reasonable.  Given your resources: can you meet your client’s expectations in a time frame that’s profitable for your business?

Study your clients business and market using competitive intelligence tools. Try to determine what type of results would be reasonable given your experience.

Look for these two red flags in your pre-contract meetings:

1) Clients that expect you transform their business
2) And clients that can’t articulate their needs

Both of these types of clients have a habit of being unhappy down the road. Dissatisfied clients can be very hard to deal with when it comes to collecting your fees.

Knowing this will help you craft the terms of your contract. Example: Consider structuring the payment with an up-front fee, with the remainder due at delivery.

PPC Contract Pre-step #2

Establish a verbal agreement before you write up the contract.

Work to get a verbal agreement in place before you submit a written contract, and verbalize that you understand the client’s targets.

Here’s an example of verbalizing fees and expectations:

Your fee for managing AdWords campaigns is $2,000/month. The client wants to spend $10,000 a month on ads, and they hope to achieve 100 conversions.

If the verbal terms are favorable for both parties, then you can move on to the next step.

Now, let’s talk about what should and shouldn’t go into a PPC contract.

PPC Mastery Course student question

This contract discussion was sparked by a question from one of our PPC Course students.

Dale asks:

A client is asking us to sign their agreement which is outlining the terms of engagement. For instance what work we’ll do each month and the target conversions and CPA, is this normal?

Dale wants to know if it’s standard for a client to put cost-per-acquisition (CPA) and conversion metrics in his service contract.

The first thing Dale should do is consider having an attorney review his contract. You always want to get proper legal advice before you agree to the terms of a contract. Especially, if you do not understand a term, always know what you are agreeing to.

That said, I would never agree to a contract that was contingent upon CPA or expected conversions.

Here’s why:

Results are not always within your control. You can’t predict your client’s participation. You also can’t predict the market or demand for your client’s product. It would be entirely possible to do a great job as a PPC manager, and still not achieve the target CPA or conversions.

Contracts are meant to protect you from liability and outline the terms of payment.  However, they shouldn’t bind your payment to results that rely on factors outside your control.

Here are few more reasons I would avoid specifying results in a PPC contract:

1) Results and activities are a two-way street

Results based contracts assume the client’s participation, and may not allow the service provider to force the client to participate.

2) If the service provider does not have autonomy, then results are not guaranteed

Contracts that specify results assume the service provider has end-to-end control of running PPC campaigns. That’s great if this happens, but from my experience, clients rarely relinquish full control to outside service providers.

3) It’s the adjustments that generate results

Results are driven through adjustments. Adjusting to the dynamics of your client’s market are what drives the best PPC results.

The question then becomes whether your contract allows you the time to achieve the agreed upon results. In other words, is specifying exact results in your contract setting you up for failure? How do you know the results are possible before you’ve even begun to work on the client’s account?

You can’t fully predict results in your clients market. New or increased competition can drastically change your results, and it takes time to fully understand the landscape.

You also can’t predict changes that will occur on the advertising platform. Google can change their policies. Facebook can eliminate publisher posts. You can’t predict these shocks to the market, and they will have a big impact on your results.

With these things in mind, let’s get into the Do’s and Don’ts guidelines for building PPC contracts.

Do’s and don’ts guidelines for PPC contracts

Do's fro building PPC Contracts

Here are some things you should do to build PPC contract:

Work with an attorney

I can’t stress this point enough. Find an attorney your comfortable working with and have them review your contracts. This is especially important when you’re first starting out.

Limit risks on both sides

Contracts are a two-way street. You want both you and your client to be happy. Try to limit the risk for both parties.

One example of limiting your risk is placing an AdWords account build fee on the front end of your contract. A setup fee can help protect you from the client walking away before you recoup the costs of your startup work.  (To learn more about how I build a PPC service fee you can read our AdWords Specialist article).

On the other side, clients may not want to get locked into a long-term agreement. Clients also need the flexibility to make adjustments.

List payment terms and contingencies

Payment terms should specify when you get paid. And the contingencies should state the work you need to complete.

Protect your best interest

A contract should protect you and your company against liability.

Consider how to define the services you’ll provide

Although results shouldn’t go into your contract, you do need to specify services. Make sure the services you agree to provide can be identified and fulfilled. Additionally, a well crafted services clause can help to identify out of scope work or additional projects for the client.

Make sure each service is clearly trackable

Your services should be line items that you can check off as you complete them. In other words, how does the client know that you have completed the service in accordance with your contract. Consider adding a deliverables or milestone section to your contract.

Add in standard contract language in addition to your services

The services are typically a small part of the contract, but where you will spend most of your time when crafting your contract.

The part we all gloss over as “words, words, words” is what makes the contract enforceable and adds to protection if disagreements occur.  There are a lot of contract templates out there, and you need to be sure they are valid in your state or your country and are crafted with terms favorable to you.

Is your intellectual property being protected? Can the person you are working with enter into a contract on behalf of the company? Are you in compliance with privacy laws of the jurisdiction you are working with? Is there sale, use of VAT tax and who is paying it?

This is where your attorney will be most helpful.

Make sure everybody is happy with the terms of the contract

Work to design a contract that pleases both parties. If one side is unhappy with the contract headed into the deal, they’re unlikely to be satisfied later on. Unhappy clients are hard to collect from, even with a contract in place. The only one collecting in this case will be the attorneys. (ba dom boom)

What types of things shouldn’t go into a PPC contract

Don't for building PPC Contracts

Don’t put any marketing language in your contracts

Your marketing is done before people start signing on the dotted line. Sales and marketing language does not belong in a contract.  Your contract should be used to formalize the terms of service and payment, not to advertise your services. If you are signing a contract, then your sales work is done so let’s leave it in the proposal.

Avoid using specific targets or results in your contract

As we discussed earlier, your PPC contract should not commit to delivering results you don’t have control over.

Don’t assume both parties understand industry jargon

Eliminate industry related terminology as much as possible.  Stick to describing your services in clearly understood language. If you need to use jargon or an abbreviation, then define the jargon/abbreviation in the contract.

Don’t sign a contract if it doesn’t feel right

Many of us have done this one. We are eager for new business, so we sign a contract that we start to regret the seconds the inks dry. To avoid this problem, try to give yourself a couple of days to think over any new contracts. If you really want the business, but the terms don’t feel right, consult your attorney.

Don’t leave any language open to interpretation

Here’s an example of ambiguous language from the PPC world: “optimize.” Don’t put this word, or any other words that can’t be defined in your contract.  Optimal is a subjective term, not a definitive outcome.  Stick to language that’s is well defined.

Don’t assume everything is going to work out perfectly (it never does)

The best way to resolve challenges and issues is through communication. Let your client know when you run into issues as soon as you spot them. Let them know the cause and effect of the problem. Is it a time delay? Additional cost? Work together to find a solution. Document any changes to your initial agreement with and addendum or amendment to the contract. 

Don’t forget why contracts exist (for when things don’t go according to plan)

Hopefully, you can do your work and avoid having to execute your contracts. But the PPC world has a lot of variables. Even the best clients can get frustrated when the results aren’t what they hoped for. Contracts protect your interest when things don’t go according to plan.

PPC contract guide

Do you want us to create a PPC Mastery Course contract guide? We have been considering the idea of creating a flexible, but effective PPC contract guide to help you with considerations for crafting your contract.

Is this a product you want?  If you’re interested in purchasing the PPC Mastery Course Contract Guide leave a comment below or send us a message at support@ppccourse.com.


This post and video was episode 37 in our 90 Day Challenge digital marketing series.

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  • Jaap says:

    A template contract would be very interesting. A yes from me!

  • Thanks a bunch for this awesome info regarding contracts! I learned quite a lot from this blog.

  • Subhash says:

    would be awesome. Many thanks

  • Quentin Monden says:

    Interested in purchasing the PPC Mastery Course Contract Guide. Having a flexible and effective PPC contract guide would be helpful.

  • Would be interesting to draft a few contract templates for SEO and PPC.
    Thank you for the insights.

  • Josh says:

    Yes, a flexible contract would be helpful.

  • Design Lobby says:

    “Do you want us to create a PPC Mastery Course contract guide?” – YES PLEASE!!! This would be amazing!