Who owns the ad accounts a marketing agency runs for its clients?
It varies from client to client. Some ad accounts belong to the agency, and the client only sees reports. Others belong to the client, with the agency added as a partner. The client agreement and the way each account was opened usually show which it is, and a lawyer can read the terms.
A buyer of a marketing agency may assume the agency owns the accounts it runs. Often it does not. The question changes what the buyer is getting, because an account the client owns can leave with the client. The marketing agency due-diligence guide raises it as a risk. Here is how to answer it in practice.
Two arrangements, very different consequences
In one arrangement the agency opens and owns the account, pays the platform and bills the client. In the other the client owns the account and gives the agency partner or manager access. In the second case the agency holds no account it could sell. Ask which arrangement each client has.
Check how each account was set up
Ask for a list of accounts by client, showing who is the account owner, whose payment method is attached and which agency staff have access. Then compare the list with the client agreements. If the paperwork says one thing and the account shows another, ask the seller to explain. Reading the contract terms is a job for your lawyer.
Understand what you are buying
If most accounts are client-owned, the buyer is mainly buying people, skill and relationships, not assets. A buyer should weigh those relationships, and the handover then matters more. Ask which clients know about the sale, which would need to approve a change and how the seller will help keep them.
Ask the seller
- Which accounts does the agency own, and which does each client own?
- Does any account sit on a staff member’s personal profile?
- What do the agreements say about ending service and returning access?
Related reading
15 pages on the same subject, grouped by topic.
Selling
- Expert answerWhat changes hands when I sell my online shop business in Canada?
- GuideSelling a managed IT services business in Canada
- Expert answerWhat happens to an indemnity if the seller dissolves the company?
- Expert answerWhat if the seller’s numbered company has no assets left?
- Expert answerCan I split my business into two companies before selling?
Buying
- Expert answerDo indemnities survive if the buyer amalgamates the target company?
- Expert answerDo I face reasonable notice exposure when I buy shares of a company?
- Expert answerWill a marketing agency’s retainer clients stay after I buy it?
- Expert answerHow can I tell if a web design business for sale is really profitable?
- Expert answerHow do I read a media agency’s revenue when client ad spend runs through its books?
- Expert answerHow is buying a creative agency different from buying a marketing agency?
- Expert answerBuying a web design business vs starting one: how do they compare?
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 03Business Development Bank of CanadaGovernmentAfter buying a business, what is the next step?
- 04Canadian Federation of Independent BusinessResearch dataSuccession Tsunami: Preparing for a decade of small business transitions
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