Media Agency Contracts, the Starting Point for Change – From Digital Transparency to Diversity & Inclusion

Over the past several years, our industry has been consumed in endless discussion and debate regarding the ongoing issues of digital media management; from brand safety, ad fraud, ad viewability and data protection, to the lack of transparency and accountability leading to billion dollar black holes.

The issues are discussed and passed around between media agencies, media owners, countless go between tech suppliers and advertisers like a hot potato, with industry bodies and committees trying to develop guidelines to help reign in the chaos.

While the hot potato game continues, we’ve been reviewing media agency contracts across global advertisers and agencies, over 30+ in the past year, and are continuously surprised to see how contracts are not evolving with the changing landscape. There is clearly a disconnect which is fuelling the issues of transparency and mistrust between client and agency, which are still at high levels according to a 2019 ANA Study.

In the current climate and as we head into a post third-party Cookie age, we would encourage advertisers to take the time to review their contracts. If the issues surrounding digital management, data ethics, transparency and accountability are not addressed head on in contracts, then why should we expect any real change in industry behaviour? More worrying is that many contracts we see are unsigned, yet business is being conducted in hopes nothing goes wrong. An optimistic but unrealistic view as even in the best client/agency relations an issue will eventually arise.

To help address this, we’ve summarised key areas/details we regularly see missing in contracts. It’s not an exhaustive list but hopefully a starting point for review.

KEY AREAS MISSING:

• Data Privacy – while data protection clauses are included in most contracts, largely due to the introduction of GDPR in Europe in 2018, as we enter a post-cookie era, we highly recommend ensuring that data privacy and ethical data management is covered in contracts. If there are any doubts on the importance of data ethics, I would highly recommend watching “The Great Hack” (on Netflix), which is an in depth look at how the Cambridge Analytica Scandal arose and how personal data is being used and can be misused. It’s an eye-opening reality check on what can occur if boundaries are not set.
• Brand Safety & Ad Fraud – We seldom see protocols on these topics, outlining how the agency will help prevent and protect advertisers from the issues, how they will be addressed should they arise, and who is accountable. If it is referenced, it’s vague at best with clauses of agency making “reasonable efforts” with no clear definition of what that actually entails. If the accountability rests with media owners or tech providers, there is often little detail as to how the agency will resolve it with them on behalf of the advertisers. There is also little reference to the application of industry standard practices set by ISBA, WFA or local market equivalents.
• Right to Audit – while typically included in most contracts it’s usually in the context of auditing media costs. The auditing of processes, data and tech is seldomly referenced.
• Disclosed & Undisclosed Programmatic Models – details are often missing that clearly outline what info will and will not be provided, dependent on the model.
• Ad Tech Costs – details on costs, how will they be managed, monitored, billed and audited for areas such as ad serving, ad trafficking, data dashboards and tech platforms used to deliver media services etc are often sketchy.
• Agency Volume Deals (AVBs) & Unbilled Media – while typically included in contracts, the exact details as to when these should be reported and credited back to clients is often not clearly defined. With regard to unbilled media, the length of time by which a media owner can legally invoice an agency (in respective market), and in turn the agency back to client, is also seldomly indicated.
• Granular Scopes of Work – the majority of SOWs we see in contracts are very high level, often with no reporting cadences as to when key reports should be provided to clients. This lack of granularity frequently leads to misalignment on expectations between client and agency, which can negatively impact agency appraisals.

To compound the issues, many “day to day” client and agency teams often don’t know what’s actually been agreed in contracts, as it’s been managed by C-level stakeholders who are not involved in the day to day running of the business.

DIVERSITY & INCLUSION ANOTHER BIG MISS

While the subject of D&I actually warrants its own blog, it’s worth a mention as our industry discusses it extensively, but is unfortunately more talk than action based on the IPA’s 2019 Census Report. There are actually very few times I can recall in my 20 years agency side, when a client has asked how we ensure diversity of staff on their business, what is the agency’s recruitment approach and how do we ensure it’s not treated as a tick boxing exercise.

If you look at the leadership teams of most global agencies today, as well as global advertisers, the picture is anything but diverse. The only way agencies will truly action D&I, as well as sustainability goals, is if advertisers request it and include it in their contracts. Only then will true change arise.

LOOKING AHEAD

With the ever-changing media landscape, we would strongly recommend reviewing contracts on an annual basis. In most cases, contracts can be updated through straight forward addendums.

Having been marketing and agency leaders at companies like Coca-Cola, ABinBev, Saatchi, Dentsu Ageis, OMD, PHD and Auditors, we’ve seen hundreds of contracts and worked with some of the best legal teams. If you need any support with your contract, from a simple high level review to a complete make over, please fill in the form below. We would be delighted to help and can also refer you to our legal partners for further support if needed. For more information on Flock please go to https://www.flock-associates.com/about/