ANA Updates Contract Template for Media Agencies to Promote Greater Transparency

“While significant progress has been made in bringing more transparency to the relationships between advertisers and media buying agencies, much more is needed,” ANA CEO Bob Liodice said in a statement. “The new contract template is more comprehensive than the original and contains updates that address the current marketplace. We urge all advertisers to review the changes and incorporate them into their current media agency contracts, where applicable.”

In March 2017, the ANA called on seven major ad platforms to allow for independent auditing. Last December, an ANA report found that 35 percent of brands are moving programmatic buying away from media agency partners.

The new template includes language defining best practices for media buying agencies globally, allowing those outside the U.S. to make local modifications and include such references in their contracts. It also updates the definition of “programmatic media” to better reflect that used by the Interactive Advertising Bureau and updates its definition of the term “conflicts of interest” to include the clarification that agencies should disclose “investments if the media agency or its affiliates have a financial connection to a company that provides services to the advertiser.”

There’s also a revision to the definition of “affiliates” to “ensure the defined term ‘holding company’ is the highest holding company entity possible.”

Following a K2 Intelligence report that found that markups on individual sales can be between 30 and 90 percent, the revised contract template includes an added notation to “principal or inventory mark-up” and “principal or inventory sale” setting a “capped amount of mark-up the media inventory seller (typically an agency affiliate) can make.”

“Advertisers need to ensure the agency is not improperly increasing fees by having multiple affiliates in the supply chain marking up costs as the media makes its way between advertisers and the publishers,” the organization noted in a statement.

Additionally, the organization deleted “barter inventory” from the definition of “rebates and incentives,” while adding definitions for “transaction data” and “value pots.” The ANA also included a recommendation that advertisers include an auditor NDA as part of their agreements with media buying agencies.