Reed Smith’s Nick Swimer: why media buying needs to move beyond standardisation

The recent publication of the Incorporated Society of British Advertisers (ISBA) media planning and buying template was met with wide interest and debate from the ad industry. It sought to address some thorny issues that previous versions had danced around; and by seeking a settled position, aims to reduce (typically un-budgeted!) time and costs on both advertiser and agency side re-inventing the contractual wheel; allowing the parties to focus their attention on the real value of the contract.

But here’s the thing; all too often advertisers treat these industry wide templates as the finished article, not the starting point. This approach has undoubtedly led to a loss of value for many. Whilst these templates set out the broad overall service framework and intention to operate in an open way, they cannot reflect the structure of the commercial deal, the markets within scope and the manner in which the advertiser and agency are set up to govern a partnership – so the end product needs to go further.

Advertisers have their own approach to evaluating performance, reporting requirements, financial and billing processes and approvals for authorising budgets and media plans all of which needs to be reflected in the agreement. They also have their own sensitivities in relation to using data and buying digital media. Furthermore, the extent that an advertiser relies upon its agency for the programmatic buying and performance measurement tools will also have an impact on costs and liability. All of these factors need to be considered in an agreement, and all of these factors will differ from company to company, so a standardised template cannot be relied upon.

Overseas agreements

Crucially, the ISBA template speaks only to the principal buying model operative in the UK and infers UK laws. As such, this refers to UK practices and laws in relation to TV buying, programmatic services, measurement metrics, data protection, privacy, employment and anti-corruption practices. Advertiser’s must therefore always bear in mind that these templates are designed for domestic planning and buying rather than a regional or global framework.

For example, the ANA template comes from a US media buying model. In this model, the agency is an agent-in-law, and the agency has all of the attendant obligations of a fiduciary when buying media. Digital media buying in the US is also often undertaken on industry negotiated terms. As such, the ISBA template is not appropriate for US buying activities and vice versa.

An international approach to media planning and buying agreements requires businesses to take account of the different buying practices, customs and sensitivities of the various markets within the scope. It is true of course that some of this can be effected through supplementary local service agreements, but advertisers will often be keen to ensure that any framework agreement harmonises the approach across all markets. This avoids local service agreements becoming an opportunity for a wholesale renegotiation of terms.

Best interests at heart

It is important to remember that trade associations represent a broad church, and some members may have experienced issues that are not addressed in any template or simply not agree to the position its trade body has put forward. For example, there remains a lack of consensus around called ‘value pots’ and advertiser’s may approach the calculation of Net Media Spend through an entirely different commercial lens.

Inventory media also remains a battleground. The challenge of really capturing what this means in markets where all media is acquired by the agency as principal to contract remains. What’s more, media auditors will also continue to feel hamstrung by provisions that restrict access to records, which may be important in validating compliance.

Trade associations should be applauded for their significant work in seeking a settled industry wide framework, but as no doubt ISBA would agree, these templates are only a starting point for discussion. They require significant tailoring and are not a document on which a commercial appendix can simply be stitched on.

Nick Swimer is a partner at law firm Reed Smith LLP. He is a former head of legal at UK broadcaster Channel 4.