Online Ad Groups Release Updated Ts&Cs

A year after their first stab at hammering out some of the online advertising industry’s exasperating contractual problems, the Interactive Adverting Bureau and the American Association of Advertising Agencies are revisiting their Terms & Conditions for Internet Advertising, with a new version of the document.

The new release addresses a handful of areas where the initial Ts&Cs document — which is designed to be used as a standard for online media contracts — either sidestepped complex issues, or took stances more favorable to advertisers than publishers. Now, designers of the new Ts&Cs say the revisions mark a significant change for the better.

Unlike the earlier document, which some criticized for its shortcomings, the new Ts&Cs address several important issues, like third-party ad serving.

Specifically, the new Ts&Cs stipulate that publishers, to a degree, must abide by impression measurements provided by agencies’ third-party servers. If publishers and third-party ad servers’ counts for served impressions differ by more than 10 percent, then the agency will work to reconcile the figures. Should the agency be unable to resolve the discrepancy, it has the right to either ask for a make-good, or to simply pay the publisher for its tracked impressions plus enough to cover a 10 percent discrepancy.

“The language that’s in the document now reflects a compromise that has been made informally between many agencies and media companies over the past year,” said Yahoo!’s Jeff Weitzman, who co-chaired the joint IAB-AAAA task force with Walt Disney Internet Group’s Susan Berg and The Digital Edge’s Adam Gerber. “It represents a compromise that we feel will allow us to do business more smoothly.”

Weitzman, who is senior director of client services at Yahoo!, conceded that the document’s ruling remains a far cry from actually specifying that third-party ad servers’ figures have the final say over whether a publisher has met the terms of an insertion order.

Instead, he said the new Ts&Cs represent the best possible outcome, considering that the leading industry associations had not previously proposed such a standard.

“It really reflects what we hope is an interim measure, while there are so many different methods of measuring,” he said. “At the same time, there’s a recognition out there that the IAB and the AAAAs have made great strides … soon we will have an agreement on definitions and methods for accounting. So basically, [the new Ts&Cs] are a recognition of the current reality that it’s very difficult for two parties to measure a process in two different points in the process, and come up with the same number.”

Whatever losses continue as a result of reconciling discrepancies “will more than be made up by the effectiveness that we bring back into our operations” through the terms of the new Ts&Cs, he said. “Right now, it’s a way to get business done that offsets the tremendous cost of dealing with these discrepancies.”

In addition to more comprehensive rules governing third-party ad serving, modifications were made in the Ts&Cs to terms covering notification, reporting, and billing procedures; make-good definitions; publisher rejection of ad materials; and indemnification. Those updates, Weitzman said, reflect greater input from the publishers, and a greater sense of cooperation than the previous version.

“For perhaps the first time, [publishers and agencies] really sat down and helped each other understand how our businesses worked — how [agencies’] Donovan systems work, for example; how they pay bills; how they needed to reconcile campaigns against their system … as well as realities on our side.”

For instance, the terms concerning make-goods “reflect the reality of what happens when these situations occur, instead of making blanket assumptions about what should or should not be done,” he said.

As with the previous Ts&Cs, adoption of the new document — which will be posted on the IAB and AAAA Web pages and promoted to each group’s membership — remains voluntary. Yet the revision also involved representatives from AOL Time Warner , Terra Lycos , Foote, Cone & Belding, Modem Media and OgilvyOne, which many believe will give it a leg up on becoming commonplace.

Weitzman said he hoped that the industry proves more accepting of the new Ts&Cs.

“I want to make sure that media companies and agencies understand that we really went over every word in this document, we considered every phrase, clause and sentence and negotiated and came up with a document that is like any good contract: neither side is incredibly happy or upset with it. It represents a balance of interest, and I hope the industry takes it as such and doesn’t pick it apart. We like this … as a balanced document that both sided can agree on as a way to do business together.”

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