The Association of National Advertisers (ANA) recently released an update to its Master Media Buying Services Agreement template for use by advertisers and media agencies in negotiations with one another. The new template attempts to build in new provisions as well as revised definitions that capture and build on the importance of increased transparency, essentially requiring transparent practices in its terms.
Define + Refine
Major changes to the definitions include:
• The definition of “affiliates” – The template includes a revised definition and encourages the parties to define “holding company” as the highest holding company entity possible rather than relegating such an entity to a mere agency affiliate.
• The definition of “conflicts of interest” – The template adds new language to ensure that agencies and their affiliates disclose all investments or financial connections maintained with a company that provides services to the advertiser.
• The addition of “EU data protection and privacy laws” – In light of the recent enactment of the European Union’s General Data Protection Regulation (GDPR), the template agreement now contemplates the GDPR and requires the parties to ensure their practices are in compliance with the law’s terms.
• Changes to inventory-related definitions – The K2 Intelligence Report that inspired the 2016 version of the template reported that undisclosed markups on principal and inventory sales such as undisclosed services and proprietary media can amount to 30 to 90 percent. The revisions to the definitions attempt to combat agencies’ failure to disclose these types of services. The new template essentially caps the amount of the markup that can be earned by the media inventory seller.
• The definition of “programmatic media” – The new definition now mirrors that used by the Interactive Advertising Bureau (IAB).
• New defined terms “transaction data” and “value pots” – These two definitions were added as part of the ANA’s attempts to build in transparent practice requirements. The ANA asserts that advertisers should be given access to transaction data over which any vendor or media owner claims rights that would limit the advertiser’s ability to access or leverage such data. Agencies are also obligated to assist the advertiser in accessing transaction data. Similarly, value pots were previously contemplated in the definition of rebates and incentives; however, the ANA felt it prudent to create a new definition to emphasize that value pots should be completely transparent and advertisers should receive their fair share of this free or discounted media.
In addition to encouraging transparency, the ANA has also updated the sections concerning content verification, brand safety and standards to combat ad fraud and ensure that advertiser wishes with regard to where media is placed online are fulfilled. Similarly, updates have been made to better define which entities are responsible for media placement approvals and to refine the approval process.
Changes have also been made to the heavily negotiated audit sections of the agreement, notably with regard to reimbursements and auditor nondisclosure agreements. The revised provisions include language encouraging the advertiser to consult with its auditor to determine the threshold amount of an overcharge that would trigger an agency’s reimbursement obligations. Likewise, advertisers are now encouraged to attach form auditor nondisclosure agreements (NDAs) as an exhibit to the final agreement (the ANA intends to release a sample form for use as a template at a later date) in an effort to cut down on the extensive negotiations that commonly occur in this area.
The recent updates show that the ANA continues to work on this hot topic and will not settle on the changes introduced in July 2016. “While significant progress has been made in bringing more transparency to the relationships between advertisers and media buying agencies, much more is needed,” said ANA CEO Bob Liodice. “The new contract template is more comprehensive than the original and contains updates that address the current marketplace. We urge all advertisers to review the changes and incorporate them into their current media agency contracts where applicable.” We will continue to monitor the media industry for reactions to the new template.