Commentary

Marketing Contracts Exchange: A Mechanism For Scaling Transparency

T&T, which has participants from major advertisers and agencies, as well as key trade groups, believes this climate is harming longstanding relationships, slowing growth and profitability.

It is even affecting consumers/viewers, who are becoming increasingly concerned about the safety of their personal data and the trustworthiness of the content they consume. Until now, there has been no single point of reference for advertising and communications terms and clauses, which relate to and support productive transparency.

Bad libraries build collections, good libraries build services, great libraries build communities. –R. David Lankes

The forum is announcing the creation of the T&T Marketing Contracts Exchange, a library of contract clauses written by the people who use them. We intend to build a great library and more importantly, a community around it.  

The Marketing Contracts Exchange is a library of clauses, contracts and legal precedents that can be consulted — at no charge — as a guide for contract negotiations for firms of all sizes — and all sides of the aisle. The Marketing Contracts Exchange will serve as a live encyclopedia of advertising transparency and ethical clauses, never before seen.

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T&T is organizing around the work and the forum T&T identified priority areas of Trust breakdown: a) Bot Fraud, b) Consumer Distrust of Marketing, c) Consumer Distrust of Advertising, d) Data Use Distrust (all parties).

This will enable organizations to benchmark their contracts and terms and will serve as a flexible repository for reviewing clauses, assembling contract templates, and incorporating the latest expert annotations for contract drafting, negotiation, reconciliation and management.

“Deal Memory”

We will be providing “deal memory” on transactions and benchmarking legal language to aid in contract negotiation – with perspectives from all participants. Our content contribution network is comprised of trade associations, individual contracts, public filings and law firms.

It will also be anchored by an original contribution, translating the ethical prescriptions of the honorable Wally Snyder of the Institute for Advertising Ethics (IAE) at the American Advertising Foundation. (Wally Snyder served as assistant director for Advertising Practices at the FTC before joining the American Advertising Federation, where he served as president and CEO from 1992–2008. (Full disclosure: Billy Price, chairman of Empower MediaMarketing, helped Wally seed the IAE over a decade ago.)

Recently, executive director Snyder completed a major study of the field: Advertising Ethics. Making the Case for Doing the Right Thing.”

These ethical prescriptions provide the foundation of an industry-standard transaction framework built upon by current and future T&T participants. Thus funding the knowledge on ethical transactions with consumers and businesses.  

The seeds of mutual distrust have been growing for a long time. Michael Farmer, consultant and author of “Madison Avenue Manslaughter,” suggests it dates back to the shift of agency remuneration from commissions to cost-plus fees in the early 1990s.

As clients put pressure on agency margins with techniques like “benchmarking” average costs, some agencies responded with margin-increasing tactics, such as the retention of media rebates.

These may not have been illegal or even unethical. Agencies — and advertisers — each have a responsibility to increase shareholder value; in many cases, their policies may have been stated in their contracts — perhaps in the fine print.  

However, there is no question there has been a lack of transparency in these dealings, which has led to an atmosphere of mutual distrust – with profound consequences for industry relationships.

The task at hand is to find ways to rebuild trust in the total system. Given the structural issues in play, it won’t happen all at once. And given the distrust, much of the reckoning will come in the terms of the contract.

The Advertising Transparency & Trust Forum is starting with the Marketing Contracts Exchange to establish “best-practice” standards by making currently used contract clauses freely available to all participants, large and small.

Special thanks and present at the creation: Jen McLaughlin at P&G, Doug Wood of Reed Smith, Jim Price of Empower, Dave Smith of MediaSmith, Bill Duggan of the Association of National Advertisers, Scott MacDonald of the Advertising Research Foundation, Jason Kint of DCN, Sam Temes of Google, Andrew Simon of Goldfish Ads, and Joe Mandese of MediaPost who recommended the venue for our launch.

Call For Comments

We are targeting launch in November. T&T is seeking open industry comment as part of its development process — and to develop recommendations on how to advance the industry with a new reference point for agreement. Comments are encouraged and can be submitted to the T&T here.

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