The Art Of The Deal For Advertisers And Agencies

I have negotiated my fair share of deals. I have sat at the table with major sports and entertainment property owners such as FIFA and Union of European Football Associations. I have butted heads with media and production companies and dueled with agencies.

It is a cliché to say that we are living in an era of unprecedented change. But we are, and the industry knows it.

That is why organizations such as the Association of National Advertisers and the 4As (the group representing the agency industry), as well as organizations such as Interactive Advertising Bureau, the Advertising Research Foundation and others, update their guidance to their respective members.

So it is not unreasonable that changes in the business contracts are inevitable. When you did your contract the last time, you most likely did not have to think about the implications of AI.

Now you have to consider not if, but how you want to govern AI as part of your work process.

If you use a lot of TV, your last contract may not be completely up-to-date with how the marketplace is evolving in terms of streamers, programmatic and connected TV.



If you produce ever more content, you may want to think about (yes, again) AI and its ability to produce simple content variations at scale, or what the implications are of content produced outside of the U.S. for use here.

If data is important to you, and you have a lot of it, your contract is likely not up to date with the latest rules and regulations how (and where!) you manage your data infrastructure.

These are just a sampling of issues that are popping up in contract reviews.

We haven’t even touched on issues such as viewability, fraud, headcount and scope, and a myriad list of other important things.

It is also likely that your own organizational structure, work process or media mix has changed, meaning that you will need to make adjustments for that, too.

I do understand that you can’t “contract your way to 100% certainty.”

All parties will have to find a happy medium between what makes common sense and what could be construed as overreach.

And this is where both advertisers and agencies need to come together more as constructive negotiators rather than as adversaries who seem to only believe the other side is out to “get them.”

Advertisers very often use marketing procurement specialists at their side of the table. Whereas in the past there was relevant criticism that these people did not understand marketing or advertising, today most marketing procurement professionals are well trained and industry-educated managers who know what they are talking about.

At the same time, the marketing procurement teams need to also recognize that (a) running an agency is a business and as such they should be allowed to make some money, and (b) cost isn’t always everything. You should expect to pay at or slightly below market price, depending on who you are as a marketer.

These two parties will have to look at the current contract and the recommendations as outlined by the various industry bodies.

Their recommendations are rooted in what is important in our business going forward. You may not need all of what they recommend, but you certainly can’t ignore all of it either.

Good agencies provide value, and that value has a price. Good marketers understand value and will negotiate a fair price.

Bad actors will do the opposite and end up with subpar outcomes as a result.

Next story loading loading..