What Agencies Must Protect
Agency NDAs need to address several categories of sensitive information:
- Client business information: Financial data, sales figures, market share, pricing strategies, and competitive positioning that clients share to inform campaigns.
- Unreleased products and services: Product launches, feature announcements, and service offerings that haven't been publicly announced.
- Marketing strategies: Campaign concepts, media plans, target audience insights, and messaging frameworks before launch.
- Performance data: Campaign results, conversion rates, customer acquisition costs, and ROI metrics.
- Third-party data: Customer lists, audience segments, and behavioral data that clients provide for targeting.
- Creative concepts: Unpublished creative work, rejected concepts, and alternative campaign directions.
The Portfolio Rights Challenge
Unlike most professional services, agencies need to showcase their work to win new clients. This creates tension with strict confidentiality:
The client's perspective: They want complete confidentiality about their strategies, budgets, and even the fact that they're working with an agency.
The agency's perspective: They need to demonstrate capabilities through case studies, awards submissions, and portfolio pieces to grow their business.
The solution: Negotiate clear carve-outs for portfolio use, including what can be shown, when (often after launch), and whether client approval is required.
Mutual Protection for Agencies
Agencies should push for mutual NDAs that also protect their own confidential information:
- Proprietary methodologies: Research approaches, strategic frameworks, and creative processes the agency has developed.
- Pricing and margins: Fee structures, hourly rates, and profit margins that competitors would value.
- Client lists: The agency's roster of current and past clients (beyond the client signing the NDA).
- Subcontractor relationships: The agency's network of freelancers, production partners, and specialized vendors.
- Internal tools: Proprietary software, templates, and systems the agency uses to deliver work.
Handling Competitive Conflicts
Agencies often work with competing clients. NDAs should address:
- Whether the agency can work with competitors (most agencies require this flexibility)
- Information walls between competing client teams
- What happens to confidential information when the engagement ends
- Restrictions on using insights from one client to benefit competitors
- Disclosure requirements if the agency takes on a competing client
Subcontractors and Freelancers
Agencies rely heavily on external talent. The NDA must address:
- Agency's obligation to ensure subcontractors sign confidentiality agreements
- Whether client approval is required before sharing information with freelancers
- Agency's liability for subcontractor breaches
- Minimum confidentiality standards for production partners
- Offshore and remote work considerations
Pre-Launch and Embargo Periods
Agencies often receive information under embargo:
- Product announcements with specific release dates
- Financial results before public disclosure
- Personnel changes and executive transitions
- M&A activity and strategic partnerships
- Crisis situations requiring coordinated messaging
NDAs should specifically address embargo compliance and the consequences of early disclosure, which can include regulatory violations (securities law) in addition to breach of contract.
Work Product and IP Ownership
Distinguish between confidentiality and ownership:
Client materials: Assets the client provides (logos, brand guides, photos) should be returned or destroyed after the engagement.
Agency deliverables: Work created for the client typically transfers to the client upon payment, subject to the master services agreement.
Agency tools: Underlying templates, stock assets, and frameworks the agency uses should remain agency property with a license granted to the client.