Ad Partnerships Putting Strain On T&Cs

Partnerships give platform companies and ad agencies the ability to offer clients a grocery list of options, from search to ad retargeting. It's an alternative to spending millions to acquire a company with a specialty or a technology missing from a product portfolio. And while it leaves the specific niche in the hands of the expert, these partnerships make terms and conditions in ad contracts more complicated and difficult to sort through.

Some companies, especially demand-side platforms, can have a dozen partners supporting one campaign. Data company eXelate announced a partnership Tuesday with Cognitive Match to improve targeting and the ad's message. In the partnership, ads are created and optimized in real-time based on targeting data. In the future, that partnership might benefit ad companies with niches in video or search.

eXelate CEO Mark Zagorski said it's important to draw a clean line. "We've spent a lot of time setting up legal agreements and defining responsibilities," he said. "Years ago, it was pretty simple -- a brand bought an ad through a direct relationship, and it was done. Now, think about how many people are involved in delivering an ad. You can have eight or nine companies involved in delivering one display ad."

Zagorski said one ad could require support from companies that provide data, optimization, yield management, ad-serving, agency, marketer, and creative optimization. "Not all marketers understand that the mechanics require multiple companies," he added.

T&Cs have become more complex, with a myriad of new options for marketers. But as the number of partners for each campaign continues to build, allowing more sophisticated ads based on technology, how are the terms and conditions changing? What should marketers ask their agency and search reps before signing on the dotted line?

Rob Griffin, EVP and global director at Havas Digital, said contracts continue to expand beyond basic payment terms and standard liability for media buying. Now they address data, delivery, and other factors. He suggests marketers need to ask three questions: Who owns the data?  How do you control for delivery criteria, such as duplication and frequency? And what's the attribution model? "The rest is all legal semantics and can be negotiated," he said.

A few trends continue to drive extended relationships and complex contracts, according to IgnitionOne President Roger Barnette. The digital marketing landscape has become more fragmented and many marketing vendors have potential overlapping areas of responsibility. When it comes to the contract, he said marketers should pay more attention to user privacy, data ownership and channel-specific budget flexibility.

LuRae Lumpkin, vice president of global paid media services at Covario, agrees. The search platform company has 14 partners. Lumpkin suggests marketers begin asking more questions, such as how the platform will provide aggregate results to compare the correct data, and what results will show competitive data in specific vertical markets. She also suggests that participation should be ensured in beta opportunities for new ad formats.

The T&C change mirrors the expansion of online advertising placement opportunities when it comes to complexity and detail. In some cases, T&Cs are attached to higher fees for emerging media. Marketers should ask agency and search reps, along with technology platform partners, whether fees differ between traditional search and emerging media placement; if so, how much and why; and who owns the data on these platforms if the client decides to switch agencies. Finally, request a list of the pros and the cons for each platform.

Even one agency running multiple campaigns for a large advertiser can become overwhelmed with paperwork. Marketers should request transparency in the process in order to ease the burden and streamline processes.

Kenshoo has completed more than 50 integrations with third-party systems, ranging from display ad servers to Web analytics tools. The goal to bring all relevant data into Kenshoo allows advertisers and agencies to see the impact of combined search and social advertising efforts.

From a service level agreement, advertisers and agencies still have individual contracts to sign with each platform to deploy their technology. The benefits of integrations come into play more when it comes to reporting, attribution, and campaign management, not in terms of simplifying terms and conditions. Kenshoo CMO Aaron Goldman doesn't think it makes the contract process more complex, but it can lower the price.

1 comment about "Ad Partnerships Putting Strain On T&Cs".
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  1. Rick Monihan from None, October 20, 2011 at 10:44 a.m.

    Publishers are, without a doubt, feeling the strain. With all the additional vendors involved, it is incumbent upon the agency to make sure all the vendors they utilize are covered for liability purposes, and that they adhere to the standards which currently drive the industry.

    Publishers, too, must reach out to vendors who they have little more than a tangential relationship with, and have them "close the loop" in the process. Agencies have agreements with vendors and publishers, but publishers will have vendors acting on behalf of agencies without any kind of agreement in place between publisher and vendor...

    Several portions of 3.0 deal with items involved in this process, but none are sufficient to cover everything. As a result, publishers who seek to close agreements with agencies must prepare addendums, or react to addendums provided by the agencies.

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