Are you working with a marketing agency? Then pay close attention!

If you work with a marketing agency, always record the agreements in a clear contract and never blindly sign a standard agreement. As an entrepreneur, you are often ultimately responsible for what is advertised under your name. If things go wrong with medical claims, keywords, competitor brand names, or customer data, the fine or claim usually lies with you – not with the agency. In this article, you will read what to look out for, with real-life examples, legal risks, and concrete next steps.

Why collaborating with a marketing agency requires legal caution

Developing a good marketing campaign is not easy. Many entrepreneurs therefore hire a marketing agency to come up with slogans, design advertisements, and run campaigns via, for example, Google Ads (formerly Google AdWords). There is nothing wrong with that in itself. The problem arises when the agreements are not properly documented and you, as the client, unknowingly assume risks.

A marketer thinks primarily in terms of reach, conversion, and return on investment (ROI). Legal regulations—regarding advertising, brands, and privacy—usually fall outside their field of expertise. And that is logical: a marketer is not a lawyer. However, in the event of violations, the law and the regulator focus primarily on the advertiser. Therefore, it is important that you know what risks you face and how to protect yourself against them.

Who is liable: you or the agency?

The short answer: as a rule, you are the one responsible to the regulator. The advertiser bears ultimate responsibility for what is advertised under their name, even if a hired agency handles the execution. Whether you can subsequently recover the damages from the agency depends entirely on what you have agreed upon mutually. Without a clear contract, you are in a weak position in this regard. That is why risk management begins with good written agreements, not with trust.

Practical example 1: medical search terms for dietary supplements

In a real-life case (District Court of Gelderland, 6 November 2018), a provider of dietary supplements had used keywords in online advertisements that, according to the judge, were unacceptable. These included terms such as liver disorder, liver pain, fatty liver , and joint complaints. These medical search terms created the impression that the supplement was a medicine capable of treating or preventing conditions.

No marketing authorization as a medicinal product had been granted for the product. The judge ruled that this constituted prohibited pharmaceutical advertising and upheld substantial administrative fines – amounting to tens of thousands of euros per violation. An important detail: the fine was imposed on the advertiser, not on the agency. In fact, the entrepreneur had even explicitly instructed the agency not to advertise using medical search terms – but that did not absolve him of his own ultimate responsibility. Whether there was intent was irrelevant in this regard.

What could have prevented this? Clear, verifiable agreements on what is and isn't allowed – and active monitoring of compliance. For example, the company could have attached the permitted health claims from the applicable advertising codes for health products as an appendix to the agreement, stipulated that the agency adheres to them, and had the keywords used reported periodically. A contract reviewed by a lawyer beforehand would likely have largely mitigated the problem.

The marketer certainly knew what he was doing from a marketing perspective – but he knew nothing about the applicable legislation. And the entrepreneur paid the price.

Practical example 2: a competitor's brand name as a keyword

Marketers need inspiration, and sometimes they seek it—consciously or unconsciously—from the competition. That can go wrong. Using a competitor's brand name as a keyword in Google Ads *can* constitute trademark infringement, but that depends on the circumstances.

This played a role in the well-known case between Portakabin and Primakabin, two providers of modular building systems and temporary office spaces. The European Court of Justice ruled in 2010 (Case C-558/08, Portakabin/Primakabin) that a trademark holder may prohibit the use of its trademark as a keyword when the advertisement makes it difficult or impossible for a normally informed internet user to see from whom the offered products originate. Whether infringement has occurred therefore varies from case to case and depends, among other things, on how the advertisement is drafted.

The practical lesson: if you want to use a competitor's brand name or wording in your advertisements, consult a lawyer first. When it comes to trademarks, you don't want to pay for your mistakes.

What is the difference compared to comparative advertising?

Comparative advertising – in which you explicitly compare your offer to that of a competitor – is permitted under strict conditions. Among other things, the comparison must be objective, non-misleading, and directed at comparable products, and must not unduly harm the competitor's brand. The line between permissible comparison and trademark infringement is thin. In doubt? Have the campaign legally reviewed before it goes live.

Practical Example 3: GDPR and sharing your customer database

It is not only trademark infringements that call for caution. Since the introduction of the General Data Protection Regulation (GDPR), marketing involving personal data has been regulated much more strictly. Take your customer database, for example. You may have permission from customers to contact them for direct marketing – great. But that does not mean you can simply pass on their personal data to a marketing agency.

If the agency processes personal data for you, additional requirements apply. These include informing your clients about who processes their data and for what purpose, a valid legal basis for the processing, and clear data processing agreements between you and the agency. Failing to do so risks complaints, reputational damage, and enforcement by the supervisory authority.

What is a data processing agreement?

If you engage an external party to process personal data on your behalf – such as a marketing agency using your customer database – the agreements regarding this must be recorded in writing. Such a data processing agreement specifies, among other things, what the agency is permitted to do with the data, how security is arranged, and what happens to the data afterwards. It is a legal requirement, not a formality.

Which agreements do you put in writing?

Avoid unpleasant surprises afterwards. When collaborating with a marketing agency, at a minimum stipulate the following:

• Responsibilities and liability: who is responsible for what, and what happens in the event of a fine or claim? Pay close attention to exoneration clauses with which the agency excludes liability.
• Advertising boundaries: which claims, keywords, and statements are permitted, and which are expressly not?
• Use of trademarks: may the agency use competitors' brand names, and if so, under what conditions?
• Privacy and data: which personal data do you share, on what legal basis, and how is the processing regulated?
• Intellectual property: who owns the designed logos, texts, and campaigns after completion?
• Monitoring and reporting: how do you check whether the agency adheres to the agreements, for example through periodic reporting of deployed keywords?
• Termination and transfer: what happens to accounts, data, and material when the collaboration ends?

Are you presented with a standard agreement by the agency? Do not sign it without reading it. Such contracts are usually drafted in the agency's favor. A brief contract check by a lawyer often pays for itself handsomely.

Collaborate safely with a marketing agency in 5 steps

1. Request the agreement in advance and have it reviewed before you sign – never blindly sign a standard contract.
2. Establish advertising limits: which claims and keywords are allowed, and which are absolutely not.
3. Manage privacy: enter into a data processing agreement before sharing customer data.
4. Monitor: have periodic reports on campaigns, keywords, and communications.
5. Are you unsure about brands or comparative advertising? Have the campaign legally reviewed before it goes live.

Frequently Asked Questions

Am I, as the client, liable for errors made by my marketing agency?

In cases of violations of advertising and pharmaceutical regulations, the regulator or judge usually looks to the advertiser, as they bear the ultimate responsibility. Consequently, a fine can be imposed on you, even if the agency made the mistake – even if you instructed the agency to act differently. Good contractual agreements determine whether, and to what extent, you can recover damages from the agency.

Is a marketing agency allowed to use my competitor's brand name as a keyword?

That is possible, but it could also constitute trademark infringement. It depends on the circumstances, particularly on whether the advertisement creates confusion regarding the origin of the products. Have this legally assessed for each campaign before going live.

Am I allowed to simply share my customer database with a marketing agency?

No, not without further ado. Under the GDPR, you must inform your customers, have a valid legal basis, and properly regulate the processing, usually via a data processing agreement. Consent for direct marketing does not automatically mean that you may pass on the data to a third party.

What should be included in a contract with a marketing agency?

In any case, agreements regarding liability, permitted claims and keywords, the use of trademarks, privacy and data processing, intellectual property, supervision and reporting, and what happens to accounts and data upon termination. Always have a standard contract from the agency checked before you sign.

What is the difference between a marketer and a lawyer in a campaign?

A marketer focuses on reach, conversion, and return. A legal expert assesses whether the communications, keywords, and data processing remain within legal limits. Both perspectives are necessary to make a campaign effective and safe.

Have your collaboration legally reviewed

A marketing campaign should portray your company in a positive light – not lead to fines or conflicts. Are you unsure about a contract with a marketing agency, advertising boundaries, or the sharing of customer data? Our legal experts will think along with you and review the agreements before they cost you money.

• Need help with your contract? Check out our page on general terms and conditions for marketing agencies.
• Questions about an ongoing dispute? Read more about our legal assistance for entrepreneurs.
• Want to brainstorm directly with a lawyer? Schedule a no-obligation intake.