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Prepared for [ADVERTISER NAME]

With a potential audience of more than 928 million people, Instagram ads are a key tool for any social media marketer. With access to parent company Facebook’s extensive targeting options and tools, Instagram advertising is an effective strategy that’s easy to implement.
Pricing your available advertising space is not an easy task since there is no standard pricing structure that can fit all websites. Each website, each blog, each content provider that uses advertising as their primary, or one of the sources of revenue, are different.
It’s still a coveted time slot, but the push to digital is making it a little less desirable. The TV advertising model changed drastically with the advent of DVRs and TiVo.

Ad Slot June 7, 2017 in Display Advertising by Justin Driskill (updated on April 5, 2019) The space on a webpage where an ad loads. The dimensions are specified as horizontal then vertical.

By [COMPANY.FirstName] [COMPANY.LastName]

[COMPANY NAME]

PandaTip: This Advertising Agreement Template is to be used by a company or individual to set up an agreement with advertiser to promote products or services and receive a commission from the company or the individual. The principal focus of this Advertising Agreement is online advertising and assets. However it is also suitable for other more traditional forms of advertising (OOH, product placement, etc.).

This Advertising Agreement (the “Agreement”) sets out the terms and conditions upon which [COMPANY NAME] (the “Company”), being a Company duly registered under the laws of [STATE] with registered number [REGISTERED NUMBER] and having its registered address at [REGISTERED ADDRESS], engages [ADVERTISER NAME] (the “Advertiser”), being a Company duly registered under the laws of [state] with registered number [REGISTERED NUMBER] and having its registered address at [REGISTERED ADDRESS] as an advertiser for the Company (together, the “Parties”).

PandaTip: The terminology used can be confusing because of the increasing tendency amongst online businesses to refer to the creator of the material being promoted as the ‘advertiser’ and the person promoting (or advertising) such goods or services as the ‘promoter’. In this Advertising Agreement we will always use the term ‘Company’ to mean the person selling the product or service and ‘Advertiser’ to mean the person advertising the product for sale but you should be aware of this difference in terminology if dealing with online marketing and advertising agencies (and affiliate marketing organizations in particular).

WHEREAS: The main activity of the Company is [ACTIVITY]

PandaTip: This section should include a general description of activity of the Company, for example, “the publication of eBooks.”, “the manufacture and sale of health and fitness equipment.”, “the sale of diamond and zirconia rings.”, etc.

WHEREAS: The Advertiser provides advertising services in this abovementioned area.

WHEREAS: The Company is desirous of engaging the Advertiser to provide advertising services on such terms as are set out throughout this Agreement and the Advertiser for his part is desirous of being engaged by the Company to provide said advertisement on said terms.

NOW, THEREFORE, IT IS HEREBY AGREED as follows:

1. DEFINITIONS. In this Advertising Agreement:

1.1 “Territory” shall mean [TERRITORY]

PandaTip: If this Advertising Agreement is limited to a particular state, country or other geographical area then this fact may be added above (for example “the USA and Canada”). Otherwise choose “anywhere in the world.”

1.2 “Social Media” shall mean all forms of social media such as Facebook, Google+, LinkedIn etc.

1.3 “Ads” shall mean online advertisements.

1.4 “PPC” , “CPC” shall all mean Pay Per Click advertising.

1.5 “PPV”, “PPM”, “PPI”, “CPI”, “CPM” shall all mean Cost Per View advertising.

1.6 “Display Ads” shall means advertisements promulgated by any display networks.

1.7 “SEO” shall mean Search Engine Optimisation.

1.8 “Video Advertising” shall mean advertising on Youtube.com, Vimeo.com or any other similar public or private video website.

1.9 “Viral Advertising” shall include all forms of viral advertising, stealth advertising and advertising using internet memes.

1.10 “Bonus Offers” shall mean the offering of any goods, services, ebooks or other benefit whatsoever whether or not of any real or perceived benefit or value as an incentive to the customer to purchase the goods or services of the Company.

PandaTip: If any of the above terms do not apply to the potential Agreement, you can remove them for the sake of concision.

1.11 “Fees” shall mean the Fees set out in Clause 4.

1.12 “Budget” shall mean the advertising Budget set out in clause 5.

1.13 Unless it is evident from the context and having regards to the generality of the Agreement that a clause intends to mean otherwise: words denoted in the singular only shall include the plural and vice versa; words denoted in any gender shall include all genders; and, terms denoting people or persons shall include both natural and legal persons (such as corporations) and vice versa.

1.14 The heading names in this Advertising Agreement are provided as reference only and do not form part of this Advertising Agreement.

1.15 This Advertising Agreement may be executed in both English and other languages. If there is a conflict between this Agreement in its various translations the English version shall prevail.

1.16 The illegality or unenforceability of any clause (or part thereof) shall have the effect of voiding that clause (or part thereof) only and not the entirety of this Advertising Agreement.

1.17 This Advertising Agreement may be executed either in one original or in two counterparts.

1.18 The terms of this Advertising Agreement shall be deemed to be binding on both Parties based on their respective conduct notwithstanding any error or defect in the execution of the Agreement.

2. PROVISION OF INFORMATION In order to enable the Advertiser to create and promulgate appropriate advertisements the Company agrees to provide the Advertiser with:

2.1 An executive summary of the Company and its area of operation.

2.2 A detailed description of the product or services being advertised including information relevant to advertising such as cost, payment means, refund policy etc.

2.3 An indication of the intended purpose of advertising (whether to promote a given product or service or raise brand or product awareness or both).

2.4 A detailed budget for advertising.

2.5 Access to their website traffic statistics in order to allow the Advertiser to tailor and improve the advertising as well as tracking commission, if applicable.

PandaTip:If you wish to add anything to the list of information that the Company will provide to the Advertiser you can do so by including extra sub-clauses here.

The performance by the Advertiser of its obligations under this Agreement is conditional upon receipt of the above and changes in these requirements must be notified in writing as soon as practicable.

3. OBLIGATIONS OF THE ADVERTISER It is agreed that:

3.1.The Advertiser may use the following means to promote the products or services of the Company as agreed between the Parties from time to time:

3.1.1 SEO

3.1.2 Text Ads

3.1.3 Image Ads

3.1.4 PPC Ads

3.1.5 PPV Ads

3.1.6 Social Media Advertising

3.1.7 Advertisement on [WEBSITE OR BLOG NAME]

3.1.8 Viral Advertising

3.1.9 Video Advertising

3.1.10 Radio Advertising

3.1.11 TV Advertising

3.1.12 Magazine Advertising

3.1.13 Billboard Advertising

3.1.14 Word of Mouth Advertising

PandaTip: Amend this list to only include the advertising types which are offered by the Advertiser.

3.2 The Advertiser is expressly prohibited from using the following means to promote the products or services of the Company:

3.2.1 Popups

3.2.2 Bonus Offers

3.2.3 Affiliate Marketing

PandaTip: Amend this list to change those advertising types which are excluded.

3.3 The Advertiser shall not promote any advert without that advert being first approved by the Company.

PandaTip: If you wish to allow the advertiser to promote without checking each advert then you can remove this clause.

3.4 the Advertiser agrees that it will surrender to the Company the following items on the termination of this Advertising Agreement:

3.4.1 A full list of keywords used in connection with the advertisement or SEO.

3.4.2 All advertising copy and creative.

3.4.3 Full details of the PPC or PPV strategy including targeted territories, budgets, and any other demographics.

3.4.4 Full details of all traffic received or directed under the campaign including Google Analytics information or similar.

PandaTip: If you prefer that the Advertiser does not have to provide this information on termination then remove this clause.

4. FEES In consideration of its services the Company agrees to pay the Advertiser [FEE], those fees itemized in the spreadsheet appended hereto which shall form part of the this Advertising Agreement and which shall be initialed by both Parties.

PandaTip: This is the most important clause in the agreement and it is the most likely to be disputed so it is important to draft it very clearly. It is often best, especially if there are multiple products and services are being advertised at various rates, to use a PandaDoc pricing table or a table from an Excel spreadsheet and to include it here, or (if it is very extensive) add it as an appendix to this Advertising Agreement.

PandaTip: Some brief examples of common pricing models: a fixed fee of 1,000 USD per month; 5% of all closed sales; the sum of 0.45 USD per click on our website introduced by the Advertiser; the sum of 1.20 USD per email submitted to our mailing list.

PandaTip: It is also very important to define each term in the fee structure, and to also reach an agreement with the Advertiser as to how that information will be tracked and shared: for example, specifying that a closed sale is one in which the conversion pixel is fired on the Company website and not refunded within a 1-week period, or that a “click on our website” must be a unique New Visitor as delineated in a Google Analytics account that both parties have access to.

5. MANAGEMENT OF ADVERTISING BUDGET It is agreed that:

5.1 during the course of this Advertising Agreement and in addition to those Fees outlined in clause 4 the Company undertakes to pay [BUDGET] to the Advertiser to be used to meet the direct costs of the advertising campaign.

5.2 the Budget shall be paid in the following manner: [MANNER OF PAYMENT]

PandaTip: If there is no flat upfront fee in addition to what’s specified in the Fees section above, 5.1 may be removed. This section should state how often the budget will be paid and where it will be paid to. For example “In a single payment at the execution of this Advertising Agreement transferred to the designated bank account of the Advertiser.”, or “In equal monthly payment of USD 1,000 paid into the Google Adwords account of the Company.”

5.3 In the event of the Termination of this Advertising Agreement the Advertiser agrees to return any unused Budget.

6. DURATION This Advertising Agreement shall commence on the date of its execution and shall have effect until any of the following occurrences at which point the Agreement will end:

6.1 the failure of the Company to pay any fees due under this Agreement within 60 (sixty) days of them falling due provided that such delay was not expressly agreed between the Parties.

6.2 The provision of 14 (fourteen) days’ notice in writing by either Party.

PandaTip: If you wish to change the amount of notice of termination of this Advertising Agreement or allow for different notice periods whether or not notice is provided by the Company or the Advertiser you can do so by changing the above clause.

6.3 The passing of one calendar year.

PandaTip:If you wish this Advertising Agreement to be shorter than a year, or to continue indefinitely you can amend or delete this sub-clause.

7. WARRANTIES AND INDEMNITIES It is agreed that:

7.1 Both Parties warrant that they have the necessary power and approval to enter into this Advertising Agreement.

7.2 Both Parties warrant that they are not aware of anything in their reasonable control which will or could have an adverse effect upon their ability to perform their respective obligations under this Advertising Agreement.

7.3 The Advertiser warrants that he/she will use only those means of advertising approved by the Company and listed in clause 3.1 and the Advertiser undertakes not to use any other means of advertising without the prior written approval of the Company and such approval shall constitute a variation pursuant to clause 9.

7.4 Where the Advertiser is holding or otherwise controlling an advertising Budget he/she undertakes to use this Budget in its entirety for advertising and not for any other purpose and to return any unused Budget at the termination of this Advertising Agreement.

7.5 The Advertiser undertakes to pause or stop all advertising on the express instruction of the Company in writing.

7.6 The Company undertakes to pay all Fees promptly and not to unreasonably withhold payment.

7.7 The Advertiser warrants that he/she will use only a) material expressly authorised by the Company or b) entirely original material and will not infringe the copyright of any third-party.

7.8 The Advertiser warrants the he/she will not use any false or misleading statements in their advertisements whether by statement, act, omission or implication.

7.9 The Advertiser warrants that he/she will not use any vulgar, offensive or disreputable means of advertising.

7.10 The Advertiser agrees to indemnify and keep indemnified the Company against any and all losses howsoever arising as a result of a breach of clause 7.7, clause 7.8 or clause 7.9.

7.11 The Advertiser acknowledges that he/she does not have the right to bind the Company.

7.12 The obligations and benefits under this Agreement may be assigned by either Party provided that the other Party first agrees in writing to said assignment.

7.13 The failure or delay by either Party to enforce any term of this agreement or to act upon a breach of any term shall not constitute a waiver of their rights.

7.14 Both Parties warrant that they will not do anything to hinder or adversely affect the execution of the other Parties’ duties under the Agreement.

7.15 Both Parties warrant that they will submit to the exclusive jurisdiction of the courts and legal system stated in clause 11.

8. CONFIDENTIALITY It is agreed that:

8.1 The Advertiser shall ensure that any confidential information or material which is obtained during the scope of this Advertising Agreement or in negotiation thereof is kept confidential including but not limited to the details of the means of advertising and the commission due or received under this Advertising Agreement.

8.2 The Company shall ensure that the details of the Candidate are kept confidential at all times and undertakes not to share this information with any third-parties.

8.3 The Advertiser undertakes that he shall not expose any confidential information except with the prior written consent of the Company or if directed to do so by a competent Court provided always that such information has not previously entered the public domain by other means.

8.4 The terms of clauses 8.1, 8.2, 8.3 shall apply indefinitely notwithstanding the termination of this Advertising Agreement.

9. VARIATION Any variation to this Advertising Agreement shall be made in writing and signed by both Parties.

10. NOTICES Any notice served under this Advertising Agreement shall be made in writing and shall be considered served if it is handed to the other Party in person or delivered to their last known address or any other such address as the Party being served may have notified as his address for service. All notices shall be delivered in English.

11. GOVERNING LAW, DISPUTES AND ARBITRATION It is agreed that:

11.1 The Advertising Agreement is made under the exclusive jurisdiction of the laws of [STATE/COUNTRY].

11.2 Disputes under this Advertising Agreement shall be subject to the exclusive jurisdiction of the courts of [STATE/COUNTRY].

11.3 Notwithstanding the terms of 11.2 both Parties agree that in the event of a dispute they will enter into arbitration before the International Chamber of Commerce before a single arbitrator whose decision shall be final.

PandaTip: If you do not wish to include the right to arbitration, or if you wish to choose a different arbitrator then please delete or amend this clause. Arbitration is a private arrangement (unlike a legal case) and is sometimes included to demonstrate to the Parties that they will not be able to achieve any benefit by threatening to sue but must rather be willing to go through a fair arbitration hearing.

IN WITNESS WHEREOF, each of the Parties has executed this Advertising Agreement:

[ADVERTISER NAME]

Signature

Name

Date

[COMPANY NAME]

Signature

Name

Date

Blog

Pricing your available advertising space is not an easy task since there is no standard pricing structure that can fit all websites. Each website, each blog, each content provider that uses advertising as their primary, or one of the sources of revenue, are different. Advertising on a fly-fishing site is different from advertising on a music-downloading site. These are some of the aspects you should consider when determining the ad rates: Slot

Site Metrics

A website is measured by the quality of its contents, traffic and visitors.

1. Contents

The contents of your website is the core of all activities. It attracts both visitors and potential advertisers. The definition of content differs from one website to another and from one industry/category to another. It could be articles, songs, games, forum posts, photos, etc. It is your primary product so be sure to dedicate your effort and attention to continuously improve and expand it. The objective is to generate more contents with high quality, relevance, usefulness to attract more visitors and advertisers.

2. Traffic

First, the more visitors you have, the more attractive your website is to a potential advertiser. Second, the higher traffic you have, the more money you will earn from your advertisers. The most basic traffic information you must know is the total number of monthly page-views and visitors. One ad view is counted as one impression. If a page contains 4 ads, there will be 4 ad impressions per page-view. You need to understand that web traffic is not equal in quality. Some is more desirable than other. For a local advertiser, visitors from a foreign country maybe irrelevant. Moreover, many locations and countries are known to generate fraudulent and inflated clicks so advertisers will want to target their ads to certain areas only.

3. Audience

How much do you know about your visitors (age, sex, locations, interests)? If you have a large audience base with similar interests, you will have a better chance to find advertisers with relevant products and higher ad rates. When advertisers know exactly whom they are promoting their services and products to, they are more likely to commit to a higher ad rate, a longer display time or a larger advertising contract.

Pricing Models

These are some of the most popular ways to charge for your advertising space:

1. CPA (Cost Per Action, Cost Per Acquisition, Cost Per Lead, Cost Per Purchase)

The advertiser is charged every time a visitor makes a transaction or purchases a product. These conversions are reported to the advertiser. Publishers can either set a price for each conversion or let the advertisers choose their price. Advertisers like this model since it offers the highest quality and return on investment. Advertisers often control the pricing with this model. For example, a lead to book a cruise can be worth $50 or more. It means the advertiser will pay you $50 when a visitor successfully calls/asks about a cruise when looking/clicking on their cruise ad from your website.

2. CPC (Cost per Click)

The advertiser is charged for each click on their ads. Clicks are priced from as low as $0.01 to more than $10 per click. Either publisher or advertiser can set the price. However, one of the concerns for advertisers with this model is click frauds. In this scheme, click counters are inflated artificially to drive up the advertising cost. Publishers should use an ad server with click-fraud prevention technology to offer protection for your advertisers.

3. CPM (Cost Per Mille, i.e. Cost Per Thousand Impressions)

The advertiser is charged per thousand impressions. It is one of the more popular model among medium-to-large publishers. Advertisers do not have to worry about inflated clicks as in the CPC model. At a $5 CPM, 10000 visitors a month with an average of 5 ad views each will earn $250. CPM is a very viable model when a publisher has more than 500,000 impressions per month. For smaller advertisers, number of available impressions can be low because of different targeting criteria, including frequency capping, geographical targeting to prevent exceeding advertising budget and yet maintain a high quality traffic. The downside with the CPM model is there is no consideration for clicks, conversions and ultimately purchases.

4. Flat Rate

The advertiser pays a fixed price to display an ad for a period of time. This is popular among smaller publishers and advertisers because it is the simplest model with very predictable earning/expense. Publishers present their website metrics (page views, audience reports, CTRs) to the advertisers and name their advertising rates. Advertisers consider the pros and cons and make a decision to purchase an ad space for a period of time, often one calendar month at a time. Rates depend on the expected traffic, ad placement location, ad dimension/size, and length of contract. Since the earning is known ahead of time, publishers can focus on other areas of their website. This model allows both publishers and advertisers to budget their costs and predict their profits.

5. Hybrid or Combination of Multiple Models

With advanced ad servers like AdSpeed Ad Server, you can combine multiple pricing models to work for both you and your advertisers. For instance, $1000 per month plus $1 per click is a combined model of Flat and CPC. It means the publisher will have some guaranteed income (Flat) while earning extras on the clicks (CPC). The advertiser can enjoy discounts on the flat rate while providing incentives for performance.

Advertisers

Understanding your advertisers is one of the key factors in winning their contracts. If you know their services, products, advertising objectives, requirements, needs and goals, you can make your offer that much stronger by emphasizing the quality of your audience to smaller advertisers, or highlighting the number of page views (i.e. reach) to brand builders.

1. Number of Advertisers

If you have a large network of advertisers or a good sales team that can approach many advertisers, you have more demand for your given ad inventory and you can charge more for advertising. Thus, it is always a good idea to build, maintain and expand your list of potential advertisers.

2. Product Characteristics

CPC and CPA rates for a diamond advertiser are likely much higher than ad rates for a toothpaste ad. Knowing the products/services can help target the right section of your website.

Research

After reading about different pricing methods, determine the best pricing model for your business. Find similar sites to your website and do a little research on their pricing. Put yourself in the shoes of a potential advertiser. The objective is to find a popular, relevant, high-quality website or blog at a reasonable ad rate.

Price Comparison

A really simple and effective formula for an advertiser to compare between one site to another website is: cost of the advertising space divided by the traffic that the ad will receive. The lower CPM rate the better. Let us consider these two blogs:

Blog #1: charges $500 monthly for a 125x125 banner spot above the fold. It generates 100,000 monthly page views.
Blog #2: charges $1,000 for a similar ad placement. It generates 500,000 monthly page views.
Using the formula cost of advertising/traffic, Blog #1 has a $5 CPM while Blog #2 has a $2 CPM.
Even though Blog #1 charges only half the price of Blog #2 upfront, it's actually less effective. Blog #2 is a better platform for advertising because of its high traffic and lower CPM rate.

Try to determine an appropriate rate for your own website. If you charge too much, advertisers will go elsewhere. If you charge too little, you are not maximizing your advertising potential.

Price Adjustments

After determining your expected rate, you can start to offer advertising to a few potential advertisers. Everything needs a starting point. You do not have to stick to a single pricing forever and you can always adjust your price over time. However, if your website is recently launched, try to offer promotions and discounts in order to build your advertiser network.

For example: You can start charging a low CPM for the first 3 - 6 months to let advertisers test-drive the effectiveness of their ads. Or you can charge a low CPM then gradually increases the rate as your traffic improves. You can provide incentives for early advertisers to lock in the low rates. However, communicate clearly to your advertisers on these price changes and your reasons. You want to build long term relationships with your advertisers.

Take the First Step