A year after launching the Advertising Trust & Transparency Forum and proposing the formation of an “advertising contract exchange,” the ad hoc group has delivered on its promise. The exchange, dubbed ACE (for Advertising Contract Exchange), is being hosted by the American Advertising Federation (AAF) and functions like a glossary of terms that represent best practices and guidelines for defining terms and using language in contracts between advertisers, agencies, the media and various third parties who help process it.
The database sits on the AAF’s Institute of Advertising Ethics hub, but it represents a coalition that includes the Association of National Advertisers, American Association of Advertising Agencies, as well as the T&TF’s “Quadrilateral Compact.”
The database is accessible to anyone in the industry and the use of the contractual language is 100% voluntary and self-regulatory, AAF Executive Director Wally Snyder explained to me last week.
“This is really just a starting point,” he said, emphasizing that the terms are “not standards,” but they’re “more than principles,” too.
“They are more like illustrations of what to do and in many cases, how to do it,” he explained, adding that the terms are the foundation of the contractual language that sets the terms for determining the responsibilities of all sides of the advertising process.
“Contracts have to be very specific,” said Snyder, a lawyer by training who worked for the Federal Trade Commission before joining the AAF.
In fact, Snyder said much of the seminal language in the initial version of the exchange is derived directly from the FTC, which is the chief regulator of advertising practices, and part of the exchange’s mission is also to facilitate trust and transparency with consumers, not just the advertising industry.
“We are at a point where people are starting to recognize they have a problem with lack of trust between consumers and the industry, and the best way to build trust is with transparency,” he said, citing the lack of appropriate disclosure in native content and influencer marketing as a prime example.
He noted that the FTC recently has sued some big brands -- retailer Lord & Taylor for not disclosing it paid influencers to promote its fashion lines, and security firm ADT for failing to disclose that it paid security experts for touting its service.
On the plus side, Snyder says those cases are sending a signal to consumers, as well as the industry to be more vigilant about disclosing things.
In the spirit of full disclosure, Snyder also concluded that the new contract exchange has a visible disclaimer clearly stating that it is up to each company to use the information in the database in the right way.