GroupM, the biggest buyer of media in the world, has quietly altered the terms and conditions of its online advertising buys with publishers, including one that is likely to stir a major debate over
data ownership in the online advertising marketplace. The new "T&Cs," as they're called in the industry, affect deals for all of the WPP division's agencies, including Beyond Interaction, Catalyst
Online, Maxus, MEC Interaction, MediaCom, Mediaedge:cia, Mindshare, and Outrider, and come as a joint-industry taskforce has been working feverishly to update seven-year-old industry agreed upon T&Cs
that have generally grown outdated and are in urgent need of revision.
While it has become routine for both advertisers and publishers to revise the old industry standard terms - the so-called
"Version 2.0" of the "Terms & Conditions for Internet Advertising" ratified by the American Association of Advertising Agencies (AAAA) and the Interactive Advertising Bureau (IAB) in April 2002, the
magnitude of GroupM's revisions, and the way it addresses the issue of data ownership, is causing a stir on both sides of the online negotiating table.
GroupM executives say they are taking
matters in their own hands and are leap-frogging an industry process that is not likely to bear any fruit in terms of new T&Cs until later this year, because they have hundreds of millions of dollars
in new online advertising buys beginning early this year, and simply cannot afford to risk their clients' businesses on terms that most people in the industry acknowledge have grown antiquated.
But there's a "smoking gun" in the 3,551-word addendum to the current 5,723-word industry standard T&Cs that is likely to emerge as the most vexing and hotly debated of seven key areas being revised
for "Version 3.0" of the industry T&Cs that will be released later this year.
The wording in GroupM's new T&Cs, which are attached to all the insertion orders and contracts it submits to online
publishers beginning this year, amends the current industry standard by adding, the following: "Notwithstanding the foregoing or any other provision herein to the contrary, it is expressly agreed that
all data generated or collected by Media Company in performing under this Agreement shall be deemed 'Confidential Information' of Agency/Advertiser."
Experts familiar with online advertising
contracts say the term is a smoking gun, because it raises a broader industry debate over who actually owns the data generated when an advertiser serves an ad on a publisher's page. Is it the
advertiser's data? Is it the agency's data? Is it the publisher's data? Under the current industry standard, the data is considered "co-owned" by all sides of the process, but some believe the new
GroupM wording seeks to shift the rights over data ownership exclusively to the advertiser and the agency.
That's not the intent, says John Montgomery, COO of GroupM Interaction, the unit of
GroupM that oversees all of WPP's digital and interactive media services agencies.
"The real issue around that is the old terms and conditions didn't really accommodate the data question
properly, and our clients as you might imagine, have so much data generated from advertising these days, that they wanted to make sure their insights about their advertising is kept confidential. And
that the data is used by the publisher only in aggregate, not at a granular level," Montgomery explained to Online Media Daily.
He says it is not the intention of the new GroupM T&Cs to
preclude publishers from utilizing data derived from GroupM's online media buys in "aggregate," and that the effectiveness of many of GroupM's online campaigns depends on publishers doing just that.
"We acknowledge that they have to use the data in aggregate, and in fact, in order for them to optimize and benefit our clients," he says, conceding, however, that data ownership will likely be
the most contentious area of the new T&Cs.
"I don't think this is impossible to resolve," he says. "What clients are trying to protect is data that relates specifically to their campaigns and
their brands. And what publishers are trying to protect is data that relates specifically to their sites."
Among the chief concerns of advertisers, Montgomery says, is that competitors can access
data that can be used to diagnose their online advertising strategies and develop plans for countering them, or retarget their customers elsewhere on the Web.
"We want to protect against that,
and I think there is a way of accommodating both parties relatively easily," Montgomery says, adding that while GroupM has been having plenty of discussions with publishers since issuing the addendum,
he says none have complained or resisted the new wording.
As for moving ahead of the joint industry initiative, Montgomery says GroupM did not intend to break ranks, but was simply taking steps
to protect imminent client deals that could not afford to wait for new industry standard T&Cs to be ratified.
"My decision to get new GroupM terms and conditions out now was simply that we had
hundreds of millions of dollars in buys coming up in early 2009, and so many changes had taken place in the marketplace that need to be addressed. Across the GroupM companies, we are dealing with
thousands of suppliers," he explains, adding that another big factor was the inefficiencies created by GroupM agencies having to rewrite individual contracts and insertion orders, or haggle with all
of those thousands of online suppliers across a multitude of advertising buys.
"As head of operations, I'm constantly trying to find ways of making our operations more effective and more
efficient, and we were spending an enormous amount of time - as were our partners - talking about terms and conditions. Sometimes the buys are very small, and if we don't find ways of making things
more efficient, it just adds to costs on both sides," he notes.
While likely less contentious than the data ownership issue, GroupM also has revised many other key areas of the industry standard
T&Cs that the joint industry task force also is focused on revising.
"I think this just underscores the urgency with which we need to get them revised," says David Cohen, executive vice
president-U.S. digital director, at Universal McCann, and a key architect of the new T&Cs being drafted by the AAAA and IAB. "If this takes us three years to do, there will be a GroupM version, there
will be an Interpublic version, and there will be a Publicis version, and so on."
Cohen says the task force has made good progress, and even met on Friday at the AAAA offices in New York to
update where they stand on many of the key issues and wordings, and that he expects Version 3.0 to be ratified and released by the middle of 2009 or the third quarter at the latest.
While the
GroupM addendum is the most extensive issued to date, Cohen says many agencies are issuing addenda to the older T&Cs, and that the task force is hoping to head off a new spate of industry babble that
would be created by "one-offs and add-ons.
"If we can even limit that a little bit, it will be a huge help," he says, adding that data ownership is only one of seven areas that are being
overhauled. The other six include:
* Adjacencies
* Discrepancies
* Cancellations
* Electronic signatures
* Makegoods
* Late creative
Given the rapid, ever-changing
nature of the online industry, Cohen notes that even when Version 3.0 is released, the industry will already begin working on subsequent versions of what is likely to be an ongoing evolution of the
business terms between advertisers, agencies and publishers.
In an article he wrote in an upcoming issue of the Association of National Advertisers' The Advertiser magazine scheduled to be
released at the AAAA's media conference next month, Cohen notes, "We have discussed the potential of establishing a period of time in the beginning of each year in which terms and conditions are
established between agencies and publishers and then removed from discussion for the remainder of the year (what a lovely world that would be!). This work stream has begun in earnest and will continue
as we work toward a revised industry T&Cs document for release in the first half of 2009."