How to Come to Terms on IO Terms
Any salesperson receiving an insertion order from an agency is often confronted by an odd gathering of legal clauses or addenda that can seem overwhelming at first.
Industry associations representing various media are eager to provide standard terms and conditions to help streamline the process of doing business. A good example is the Interactive Advertising Bureau, which collaborated with the American Association of Advertising Agencies to develop standard terms and conditions for media buys. Those standard terms have been through three major overhauls and continue to serve as the baseline for how business is done in the digital media industry.
But they don’t cover everything. Here and there, agencies and their clients run into situations where the Terms & Conditions are unclear, or they simply don’t address the specifics of a media buy. As a result, issues can arise, and when they do, media buyers naturally want to prevent the issue from coming up again in future dealings.
Every medium is similar, with its own set of potential problems and contract terms that are intended to prevent them.
I’ve had to develop Insertion Order templates for four different agencies in my career. At each agency, I encountered buyers who had their own set of terms they had taken with them from gig to gig. And there’s often a story behind each one of them.
It’s really important that when sellers encounter these terms, they understand that there’s a reason for them. And if contracts or Insertion Orders need to route through legal departments at the publisher, I’ve found that one great way to cut back on the legalese struggle that almost invariably ensues is to simply tell the seller what the term is supposed to protect against. It goes a long way when the other party knows where you’re coming from.
For instance, for years we had a clause in our digital insertion orders that dozens of lawyers tried to mark up countless times. It stems from an incident earlier in my career (during the Wild West Dot Com Days) where I exercised a 48-hour cancellation clause on an underperforming buy. In that 48-hour window, the publisher ramped up ad delivery and served the entire contract’s worth of impressions in two days.
This led to a couple weeks’ worth of arguing over whether we were responsible for paying the full amount of the contract – a situation I preferred to avoid in the future, so we introduced a clause on our insertion orders to protect against that specific situation. (Later, the IAB and the AAAA did address this problem during one of their Terms & Conditions overhauls.)
Whenever lawyers on the other side of the table would want to strike the clause, I’d simply tell that story. It saved me a lot of time and effort.
These clauses aren’t unique to digital. One that I would insist on for print insertion orders involved publishers guaranteeing their rate base (the minimum circulation guaranteed to advertisers) on an issue by issue basis. We would ask for a makegood whenever a publisher fell short, but many times they would push back because their six-month average circulation was higher than the rate base. We would argue back that if our client wasn’t running in every issue, they wouldn’t benefit from that averaging effect. To head this off, we simply informed publishers of our expectation in our RFP and then added a clause to our print insertion orders.
Agencies should do their best to minimize non-standard legal language in their Insertion Orders, but sometimes it can’t be helped. And when those non-standard clauses trip up publisher-side legal teams, sometimes the best thing to do is simply tell the story of where the clause came from. It will save you a lot of time.
By Tom Hespos
Tom Hespos is the Founder and Chief Media Officer of Underscore, an integrated media firm focusing on health and healthy brands.