A contract for the provision of advertising services is an agreement between the contractor and the customer, which refers to the provision of these services for a pre-agreed fee. It is concluded in accordance with the Civil Code of the Russian Federation and is included in the number of contracts for the provision of paid services.
An advertising services agreement is an agreement by virtue of which the advertising distributor will be required, on the instructions of the advertiser, to disseminate advertising information within a certain territory and within a specified time frame, and the advertiser must pay for these actions.
This is regulated by the Federal Law of July 18, 1995 No. 108 FZ “On Advertising”, the norms of Ch. 39 of the Civil Code “Paid provision of services” and Art. 420-449 Civil Code (general provisions on the contract).
Several persons may participate in the agreement, both on the part of the advertiser and on the part of the advertising distributor. In relation to their obligations, they act as joint and several debtors.
The essential condition of the contract is its subject matter. They are intangible services (not the results of activities, but the actions themselves) and the term.
The agreement is concluded in simple written form.
The general rule provided for in Art. 780 of the Civil Code, there will be an obligation to personally fulfill the obligation to provide advertising services, unless otherwise provided by the contract. However, in essence, there is no personal trust relationship in this case.
Parties
The parties to the contract for the provision of advertising services are the advertiser (or customer), that is, the person who determines the object in need of advertising and the content of the latter, as well as the advertising producer (distributor, performer). The functions of the latter can be performed by one or several persons. During the preparation of the contract, the price and method of payment, terms for the provision of advertising services, rights and obligations of the parties are discussed.
The following must be attached to the contract: payment schedule, assignment, copies of licenses, certificates and permits of the customer for the advertised object, assignment. The agreement must be drawn up in two copies and signed by representatives of both parties.
The quality of advertising depends on how the contract is drawn up correctly. ″[/img]
Correct drafting of the contract
In this case, the legislation does not provide for certain requirements regarding the composition of the contract, but it must contain the following points:
- Title of the document, date and place of formation;
- A detailed description of the services provided - who, by whom and when the services will be provided, in what volumes;
- Possibility of using the services of subcontractors;
- Procedure for accepting work and quality control;
- Rights of the parties and their obligations;
- Confidentiality;
- Force majeure circumstances, conditions for early termination;
- Signatures of the parties.
Sample agreement for the provision of all types of advertising services.
Standard contract
Drawing up an agreement for the provision of advertising services is regulated by Federal Law No. 38 and the Civil Code of the Russian Federation, according to which there is a standard form for such an agreement.
How to correctly draw up an agreement for the provision of legal services with a legal entity - read this article.
Essential conditions
The essential terms of the contract include:
- Subject of the agreement – provision of advertising services;
- Parties to the transaction - you must indicate the details and names of the parties;
- Cost – indicates the total price, payment periods or single payment, and the time frame within which it is necessary to pay for the service;
- Timing – the framework for the provision of services; it is important to indicate the date until which the service will be provided to the advertiser.
Find out how to terminate the contract and draw up a notice of termination of the contract for the provision of services here.
Functions of the advertising market
Thanks to the advertising market, relationships between market subjects are created and regulated on an economic basis. They are coordinated through a price formation mechanism that maintains a balance between consumer and producer, supply and demand. Representing an economic regulator, the advertising market performs the following functions:
- promotes the unification of advertising producers and advertisers on economic grounds, which, in turn, are based on meeting the needs for advertising services, expressed through demand;
- helps eliminate disproportions between supply and demand for advertising services, bringing them into line with market needs;
- helps create conditions for the functioning of the advertising business and identifies leaders, stimulates its effective work;
- notifies market participants through economic indicators about all ongoing processes in the economy;
- eliminates the shortage of advertising services and expands the capabilities of business entities.
With the development of society and its relations, the functions of the advertising market also do not stand still and are characterized by a tendency to become more complex.
What to do after choosing the target market for your services?
In this article, we examined in detail step No. 1 on the path to advertising services - choosing a segment to focus on in order to become a leader in it. The next steps are the topics of a separate article for each stage. But so that you have a complete picture, we will briefly describe them.
Step #2. Study the selected segment for advertising services. The goal of this step is to understand clients like your best friend or girlfriend. This step is also called describing the target audience.
Step #3. Based on what we have learned, we must decide what we should be like for these clients so that they choose us over competitors when they receive advertisements for our services - this step is called positioning.
Step #4. Based on positioning, we decide what to say in advertising messages in order to attract the client’s attention, interest and convince them to contact us. This step is called developing a sales proposal for advertising services.
Steps No. 5 and 6. And only after all the steps do we decide how we will deliver our offers, through which advertising channels and with the help of which messages. These steps are called media planning and creating advertising messages.
Advertising agencies
An advertising agency is an independent organization of business and creative people whose specialization is the creation of advertising and other materials related to it. In addition, the agency may engage or acquire subcontractors to purchase advertising space and time for its placement in certain media. In this case, the interests of sellers and advertisers who are clients of this organization are represented in order to find a real buyer for the services and goods they provide.
Who works in agencies?
The agency employs not only representatives of creative professions, but also businessmen who apply the wide possibilities of advertising art to solve their business issues. These include artists, writers, market and media analysts, specialists in various fields, and researchers who use their skills and talents to help clients achieve success in their businesses. They are constantly in contact with suppliers outside the agency, who take photographs, retouch them, illustrate advertisements, typeface, shoot advertising videos, record sound, that is, perform all the types of work that are necessary to create high-quality products. They are always aware of the latest technical improvements, current production issues and price fluctuations.
Who does he collaborate with?
An advertising agency works with a variety of sellers to improve the efficiency of buyers' searches and the services and products they provide. They work directly for the client, and not for the supplier of goods or the media. The responsibility of an advertising agency from an ethical, moral, financial and sometimes even legal point of view is to provide clients with the highest quality work, to promote their prosperity, material well-being, and growth in popularity. An advertiser is not just a client who pays bills, but also an employer. The agency, in turn, satisfies his requests, is hired only to make a profit for the enterprise, and this type of service can always be refused. The cost of advertising services is quite significant.
Types of RA
Currently, there are many different advertising agencies operating in the advertising market, which are classified on various grounds depending on the tasks being solved.
Based on scale and territory coverage, advertising agencies are divided into:
- global – speaking at the international level, in different regions and countries;
- national – advertising producers within a particular country;
- regional – operating within a specific city or region. They can conclude an agreement for the provision of advertising and information services.
The principle of infrastructural correspondence operates between advertisers and advertising agencies of different types, which is that advertising services are delivered within the same type (for example, global agencies fulfill orders from global advertisers, etc.).
Based on the volume and nature of services provided, advertising agencies are divided into:
- full-service, that is, providing all services;
- specialized, providing certain types of services;
- An intermediate position between the previous types is occupied by multidisciplinary agencies that provide certain services in a complex.
Or maybe there is an agreement for the provision of advertising and marketing services at the same time? More on this later.
Features of promoting services on the market
Companies providing various types of services must be able to retain existing customers and attract new consumers, gaining their trust through various marketing activities.
There are various methods of promoting services on the market. Some service companies use only one, others use the whole complex. Regardless of the goals set, the size of the business and the range of services provided, it is necessary to develop and implement effective promotion strategies that will strengthen the company’s position and distinguish it from its competitors.
Many small businesses, such as beauty salons or dry cleaners, do not use formal promotion methods. Organizations providing business services (legal, accounting, etc.) do not always use marketing in their activities. This leads to customer churn and reduced sales.
To begin developing a project to promote its services, the company must clearly understand the promotion goals. They should be aimed at customers, intermediaries, personnel and competitors. Based on this, a marketing plan is formed. To do this, choose what you need to focus on:
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- active advertising;
- sales promotion (promotions, discounts);
- personal selling;
- direct marketing;
- public relations.
It is important that internal communications interact with external ones. Company employees must be informed about promotion goals, undergo training on how to work with clients, and understand their tasks in the promotion strategy being implemented.
You should clearly formulate your promotion strategy and develop a unique selling proposition. It is necessary to introduce additional related services (free Internet, a cup of coffee, etc.), change service technology, introducing innovations.
Note 1
The most important criterion for choosing a service company is the quality of the services provided. It is impossible to evaluate it before receiving the service. In this case, word of mouth helps. This is one of the most effective and free promotion methods.
The next method used by many firms is guerrilla marketing. It helps build a network of supporters. A satisfied client will tell 10 friends, share his emotions and impressions. Next, a loyalty program is being developed that gives a bonus to customers for inviting new people.
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Media agencies
A special position in the advertising market belongs to media agencies that rent networks of advertising media, plan and place advertising in all types of media. Also standing apart are internal agencies that operate under the terms of an exclusive agreement with a company or are part of it (as a rule, advertising budgets here are large). A typical contract for the provision of advertising services will be presented below:
- By purpose and function: political, social, commercial advertising markets, etc.
- By industry: markets for television and radio advertising, outdoor, in the press and on the Internet.
- According to the development trend: high- and low-dynamic, as well as with a decreasing period.
- According to prospects: unpromising, unpromising, promising and highly promising.
- On competition: markets of pure monopoly and oligopolistic, monopolistic competition, perfect competition.
- According to the level of monopolization: non-monopolized, monopolized and absolutely monopolized markets.
There is also a classification of advertising agencies on two grounds:
- volume of services provided (universal or specialized);
- direction of business specialization (industrial or consumer sector).
An example of an agreement for the provision of advertising services can be found in the article.
Both groups contain several subgroups. Universal agencies are staffed in such a way that they are able to provide their clients with services in all areas of advertising and information activities. Fundamentally, they are divided into two types – advertising and non-advertising. The first includes the preparation, development and direct production of the advertising product, as well as the selection of media and the necessary research.
The second direction of universal agencies is implemented in a wide variety of services: from product packaging to public relations and advertising production, preparation of annual reports, samples for exhibitions and materials for personnel training.
Between whom can a contract for the provision of advertising services be concluded?
How to choose a group of clients to advertise services?
To do this, you need to divide your entire market - all real and potential customers into groups or segments based on certain criteria. And then choose the most preferable one to promote on it. This process is called segmentation. If you have several services, then for each of them you need to do separate segmentation.
I will share my algorithm for segmenting clients for small business services.
Note: At the end of the article I have added a service segmentation checklist and a template to fill out. You can download it by clicking here >>>
Step 1. Selecting segmentation criteria
At this step, it is important to understand on the basis of what parameters clients should be divided.
Each specific business has its own set of criteria. Therefore, I’ll tell you about the criteria that I use in my practice of segmenting clients for small business services:
- Profitability;
- Stage of demand formation;
- Experience of use;
- Reason for ordering;
Profitability
The simplest and most understandable criterion. Take a list of all your clients and rank it by profitability.
Example. Service - heating of cottages .
We break down all completed projects by profitability. As a result, it turns out that the most profitable clients are those who build a cottage with an area of 200 sq.m. and order heating of the house on a turnkey basis, i.e. pay for all work: design, supply of equipment and related materials, installation, commissioning and maintenance.
Experience using the service
But one parameter for segmentation is not enough because within a segment, clients can be very different from each other. Often in services, customers who order for the first time differ from those who have already dealt with a similar type of service. Therefore, customers are often segmented by experience and “experienced”.
Example . Service: cottage heating.
Some of the most profitable clients quickly agree to cooperate because this is not their first home and they immediately see from you that you are a professional and a reliable company.
And someone demands that each stage be explained to him in a long and tedious manner, convinced, and agreed upon. The reason is that he is building a house for the first time and installing heating.
As a result, experienced and newbies need different advertising messages. For example, for those with experience, it is important to know that you are an authorized boiler service dealer. Therefore, you install only proven boiler equipment, which, if it breaks down, you can quickly repair. Experienced clients know from their own experience how convenient and reliable this is.
This information will not tell beginners anything because they do not yet know what parameters other than prices to choose a contractor. Therefore, advertising for them will be different from advertising for experienced ones. This means that in addition to profitability, another segmentation parameter is needed - “Experience in using the service.”
Reason for purchase
The same service can be ordered for different purposes. Therefore, clients choose the same service differently. This means that they are expecting different advertising messages.
Example. Service - installation of suspended ceilings .
A woman is renovating her apartment and wants an unusual ceiling that will look beautiful and she can show off to her friends.
The daughter helps her parents make repairs. Therefore, it is important for her that they do it reliably, so that it lasts a long time and does not cause trouble for her parents.
A married couple is renovating an apartment that will be rented out. Therefore, it is important for them to have ceilings that are cheap but look expensive. It is also important for them to have official documents for reimbursement of costs in case the tenants ruin the repairs.
As a result, in order to attract customers from different segments in advertising, you need to tell each of them different things:
- To a woman - that you have ceilings with which you can surprise your friends.
- To my daughter, your ceilings are reliable and don’t require any hassle.
- Landlords - you have ceilings for rental apartments with official documents.
Frequency of use
Based on this criterion, I recommend segmenting services that are consumed on a regular basis. Typically this includes areas related to beauty, health, and nutrition: beauty salons, fitness, cafes and restaurants. This is because customers who use the service regularly are often different from those who use it infrequently.
General recommendations
Choose 2-3 criteria for segmentation. I recommend the following options:
- User experience and profitability.
- Order motive and profitability.
- Frequency of use and profitability.
Step 2. Segmentation
In this step, you take the criteria and categorize your customers based on them into groups. As a result, you should have several customer segments. Within each segment there will be clients who are as similar to each other as possible, who behave the same way when purchasing your services, and react the same way to advertising messages. It is advisable to give each segment its own name.
Example. Service - heating of cottages.
We take criteria for segmentation:
- Profitability.
- Experience of use.
As a result, we get the following segments:
Segmentation as an example
Step 3. Selecting a target segment
After you have divided your market into segments, you need to decide which one to choose for promotion, what is your ideal target market? Because you have limited resources and you need to choose which clients to focus your efforts and advertising budget on.
To do this, I recommend assessing each market segment according to 7 parameters and giving a score from 1 to 10 points. Here is a list of these parameters:
- Market volume;
- Competition and uniqueness;
- Potential for growth;
- Pleasure;
- Value;
- Convergence;
- Experience.
And now about each parameter in more detail using the example of a company that provides .
Market volume
How many clients of this type are there in the market? Are they enough for you? The more clients, the higher the score.
There are more clients in the cottage heating market who want to save money. Such clients want to buy a boiler and heating pipes on their own, and are willing to pay only for design, installation and commissioning services. Also, there are more people in the market who are building a small house than those who are building a house over 200 sq.m. As a result, for this parameter in our example we can obtain the following estimates:
Competition and uniqueness
How many companies are there on the market that specialize in working with this segment? How easy will it be for you to stand out from them, make yourself known and start attracting clients? The smaller the number of competitors, the easier it is for you to stand out, the higher the score.
There are different types of competitors in the cottage heating market:
single plumbers - they are the most numerous in quantitative terms;
teams of two to four people are in second place after plumbers;
specialized companies with their own office and warehouse.
Each type of competitor has its own type of customer. For example, plumbers primarily work in the Low Profit Beginners segment. Such clients are building a small house for the first time and it is important for them to save a lot on heating services and, due to inexperience, they are ready to turn to single plumbers. The company in our example has experienced heating system design engineers with higher education in this field and extensive experience in creating reliable heating systems.
We get the following estimates for segments:
Growth potential
What is the likelihood that the number of this type of customer will increase? The greater the probability, the higher the score.
The economy in the region is going through difficult times. The number of clients who build large turnkey houses is decreasing. The number of clients who want to improve their living conditions by building their own home is growing. They are doing this for the first time and with their last money, i.e. They strive to save on everything.
As a result, we obtain the following estimates:
Pleasure
How enjoyable are you to work with this group of clients? The more fun, the higher the score.
The company from our example most likes to work with clients who are not building for the first time and already know that they need to turn to professionals and listen to their advice. Plus, the company loves customers who are willing to pay a lot to get a modern and reliable heating system.
Value
How much do clients in the segment value specialization and are they willing to pay a lot for it? For example, if I have a sore throat, then just any general practitioner is enough for me and I am not ready to overpay for a doctor who specializes in throat diseases. And if a mother has a small child who is sick, then it is important for her to see a pediatrician and she is willing to pay more than for an appointment with a regular doctor. The more customers in a segment value specialization, the higher the score.
In our example we get the following estimates:
Convergence
The degree to which the needs of the segment correspond to the characteristics of the product. To what extent do what clients value match your uniqueness? The higher the match, the higher the score.
The cottage heating company is unique in that it has the most experience on the market and highly qualified employees. But for the “Low Profit Beginners” segment, it is important to do more or less well, and most importantly, save as much as possible.
As a result, we obtain the following estimates:
experience
What experience do you have with these clients? How well do you know them? The more work experience, the higher the rating.
In our example, the company worked most with clients who are ordering for the first time and building large houses. As a result, we obtain the following estimates:
The table with the final estimates for the example company looks like this:
The ideal target market for a cottage heating company would be the “Low Profit Experienced” segment. She should concentrate her promotion efforts on this group of clients.
Two types of universal agencies
There are two types of universal agencies.
A consumer advertising agency is capable of representing a variety of clients, but the reality is that its focus is primarily on producing consumer advertising related to companies that make products purchased directly by consumers (e.g., automobiles, cosmetics, pets, etc.). The overwhelming majority of advertising products in this area are sent to general media, such as television, billboards, radio, and periodicals.
Agencies benefit greatly from their income generated by the commissions paid to them by the media. Although the cost efficiency of private agencies is not very high, they are often more responsive to the needs of small clients, and the quality of the advertising products they produce from an artistic standpoint is generally very high. Some of the agencies have carved out a specific niche for themselves in which they serve the needs of a certain market segment (for example, providing services to an ethnic group), while concluding an agreement for the provision of paid advertising services.
Industrial advertising agencies are distinguished by the fact that they provide services to companies that produce products sold by another enterprise (for example, computer software or hardware, radiation meters, smelting furnaces, etc.). Business advertising is a very important area of advertising that requires high technical skills and the ability to translate knowledge into compelling, accurate material. Advertising of this kind is placed in specialized publications and various business publications. Such media also pay commissions, but due to their small circulation, the rate here is much lower than in consumer advertising. The demand for advertising services is growing all the time.
A little humor
A positive attitude always attracts people, which is typical not only for life situations, but also for business. You can reveal the secrets of professional tricks with the help of stories whose subject is serious and related to science, but the subtext makes you smile. For example, for a doctor, you can reveal the nuances of treating a disease and at the same time focus on the recovery of the client for whom it was carried out and on his funny behavior. It is worth noting that if you decide to attract attention in this way, you should adhere to the principles of anonymity and kindness, excluding notes of condemnation.
New organizations
Recently, new organizations have appeared in the advertising business - specialized agencies, which include:
- Creative workshops are companies that provide artistic services, developing original concepts and memorable materials.
- Companies that purchase advertising time are organizations that buy and form packages of advertising time on television and radio.
The services of specialized firms are paid either by a set fee or by a percentage of the amount saved by the client.
How to achieve quick results
If you lack basic knowledge and skills in the field of marketing and advertising, as well as if you have problems with how to advertise your services at the initial stage of your activity, you should seek help from professionals.
They are fluent in the nuances of composing advertisements that have a psychological impact on a potential client and encourage him to become interested in what is offered with the prospect of purchasing. Marketers master the technical and reputational nuances of advertising. They must create it from such a perspective that any person, after reading it, understands that his problems can only be solved in the way that is positioned in the advertisement. And the customer of the marketing service should receive reputational and financial results.
