The Association of National Advertisers (ANA) has updated its services agreement template for advertisers to use when contracting with media buying agencies. The ANA said the update was part of its ongoing efforts to increase transparency between clients and agencies.
The ANA initially released the template in 2016 and updated it in 2018. The new version addresses key developments in the media buying industry over the past five years.
Since the first template was released in 2016, the ANA has worked closely with its outside counsel, Reed Smith on the effort.
“For most companies, advertising spending is their second or third largest expense after employees and real estate costs,” said ANA CEO Bob Liodice. “With U.S. ad spending reaching over $620 billion in 2022, an advertiser’s contract with its media agency must be detailed and precise given the amount of media flowing through the agency and the complexity of the media ecosystem. This revised and updated template will help advertisers achieve that goal.”
Reed Smith’s Keri Bruce added, “The updated template is a starting point for the development of a customized contract for use with media agencies performing work in the U.S. It does not represent the only method by which a contractual relationship between an advertiser and its media buying agency can be addressed. Each negotiation is different, and changes in template provisions should be expected as negotiations ensue.”
The updates include:
An overall reorganization and streamlining of provisions to improve clarity and organization.
The removal of outdated concepts.
Updated audit definitions and provisions.
Increased prescriptive reporting obligations by agency and approval obligations to help advertisers implement the agreement.
The addition of “robust” terms addressing and clarifying non-transparent services.
The inclusion of a digital media placement standards schedule to address issues such as IVT, viewability, brand safety, and management of ad verification tools.
The inclusion of a transaction data schedule incorporating specific data to obtain from vendors.
Definitions of compliance audits and performance audits were added because many advertisers perform audits in these two distinct silos. Despite the new definitions, the same overall audit rights in the 2018 version remain in the updated draft. These include no limit on the number of audits that may be performed and flexibility to have additional types of audits performed, or to perform audits together.
The “Non-transparent Services” section replaces concepts from the previous version relating to principal or inventory sale and principal or inventory mark-up. ANA members had indicated that they had often agreed to non-transparent services without fully understanding exactly what they were agreeing to, or the nature of such services. If a topic is not properly addressed in the contract, then it can end up as a line item on a media plan, or as a separate opt-in agreement, without those responsible for compliance knowing about it. To address these concerns, the template includes an approvals process with information that the agency must provide in its approval request, as well as reporting requirements for non-transparent services by media channel.
New Artificial Intelligence Provision
In this new provision, an agency must obtain the advertiser’s prior consent to use any artificial intelligence applications in the delivery of services.
ESG and DEI
ESG and DEI are important topics for many advertisers. The updated template includes placeholders for both ESG and DEI as reminders to consider the roles both play in their agency relationships. Advertisers should work with their legal counsel to determine the best placement for any ESG or DE&I requirements, e.g., in general terms, or KPIs.
The template is intended to ensure that the myriad of issues that are important to advertisers can be openly discussed and agreed upon to provide clarity, transparency, and consequent stability to the advertiser/agency relationship.
The template can be accessed here.