How often should we re-examine standard Terms & Conditions for the digital media buying industry?
This happens every few years, it seems. Insertion Orders issued at a display campaign launch end up setting off a flurry of meetings with legal teams from both the advertiser and the publisher sides of the equation. Meanwhile, this cavalcade of legal headaches is precisely what the IAB/AAAA Standard Terms & Conditions were designed to head off.
Back in the Internet Dark Ages, the digital ad industry decided legal discussions like this were eating into profit margins and putting a serious dent in speed to market. And it was right to do so. The Internet (now Interactive) Advertising Bureau and the American Association of Advertising Agencies (AAAA) decided to sit across the table from one another and hammer out a standard set of terms and conditions for the industry.
Prior to that Herculean effort, issuing Insertion Orders for a digital media buy with 10 sites on it might result in eight legal conversations taking at least an hour apiece, with agency and publisher wrangling over the same issues over and over again. It was a big drag, and when the IAB/AAAA Ts & Cs were first announced, industry practitioners breathed a sigh of relief, knowing that the time they were spending fencing with lawyers would be reduced drastically.
But in the aftermath, we noticed something curious. Both agencies and publishers would sometimes deviate from the industry standard with their contracts, essentially undoing all the progress we had made. What made it even tougher to take was the fact that many of the companies needlessly complicating things were members of either the AAAA or the IAB.
The Ts & Cs were updated a couple times. It’s been over five years since they were last revised, and in that last revision came a wonderful discussion guide that gave some background concerning decisions made during the revision process, as well as some historical context concerning those decisions.
As I said, though, it’s been over five years. And now I see the lawyers creeping back into the picture in alarming numbers. Some of them are trying to get the best deal possible for the publisher they represent. Others are just inexperienced or unfamiliar with how hard-fought some of these industry-standard agreements were. Still others believe they have a unique ad product to which the Ts & Cs ought not to apply.
Do we need an education effort, if for no other reason than to cut back on the legal resources invested and time lost? Further, do we need a new update to the Ts & Cs?
I ask because I cannot count the number of times in the past several months I’ve had to ask for a lawyer’s motivation behind a change, only to find out that she was attempting to address some contingency that is clearly already addressed by the IAB/AAAA terms. Likewise, I’ve experienced a great deal of pushback when it comes to battles that have already been fought by the IAB and AAAA, some of which I’ll detail below. Suffice it to say, though, that if you’re wrangling over Ts & Cs, these are the areas where trouble most often seems to come up:
1. Sequential Liability – This is a tough one. The rest of the media buying industry favors sequential liability, as it acknowledges the role of an agency as the agent for its client and maps out a process for publisher payment in the event it’s not forthcoming from the agency. Simply put, sequential liability makes agencies liable for payment only to the extent the agency has been paid by the client for the buy in question. Publishers have the right to demand a letter of financial responsibility that binds clients to buys their agencies make on their behalf, and if the agency hasn’t been paid by the client, publishers are empowered to seek payment directly from the advertiser.
Publishers tend to favor “joint and several” language in their contracts, which means in the event of a non-payment, agency and/or client can be held responsible. They can even be assigned separate court cases and publishers can seek remedy from one, the other or both.
Folks, this battle has already been fought. It’s been in the Ts & Cs since inception, and nobody should be trying to alter that arrangement unless they want to see an extended battle and potentially removal from a media buy.
2. Cancellation – The standards call for a variety of cancellation terms, depending on circumstance and the type of deliverable. Many agencies have their own addenda that call for more aggressive timeframes, usually because of regulated industries like finance or pharmaceuticals, which call for more aggressive cancellation clauses.
3. Data Usage and Ownership – Publishers want tighter control over their data, and they have a point when you consider the value of targeting data and its tendency to leak. Agencies and advertisers are prohibited from Repurposing, or gleaning data at the impression level for re-use later, unless they have an explicit agreement that allows for it. Still, adservers generally require cookies in order to work properly, and there’s no reliable way for a publisher to tell whether cookies dropped on users for segmentation, ad sequencing or other purposes won’t be used later in some off-site retargeting campaign. As an industry, we need to fix this. In the meantime, I’ll go on record as saying you’d be surprised at the number of agencies that pay no attention (perhaps willfully or out of ignorance) to the restrictions on retargeting or profiling users at the ad display level.
4. Editorial Adjacencies – Many agencies, especially ones representing high-profile brands, believe that with recent advances in contextual technology, they can now insist that their ads not run next to objectionable content. The Ts & Cs call for less stringent guidelines, though, and negotiating a buy with tougher standards can be a big issue.
At the minimum, I think we need an educational effort to bring publishers and agencies – especially ones that weren’t around several years ago for the last round of Ts & Cs revisions – toward an understanding of what the Ts & Cs call for and why. But I’d even go a step further and suggest we need some updates to a 5+ year old document that could stand to keep in closer step with rapidly-advancing ad tech. As of this writing, I’m not aware of any official effort to update the Ts & Cs, but would welcome an effort to do so. It would save us a lot of time, money and headache.
Tom Hespos is the Founder and Chief Media Officer of Underscore Marketing, an integrated media agency focusing on health and healthy brands.