ANA's new & improved Media Agency Contract Template: What you need to know

Although the ANA media agency contract template is based on American law and tailored to the unique commercial nuances of US media agency engagements, the areas and issues it targets are universal to advertisers in all markets and there’s value for all marketers to explore. 

Here at FirmDecisions (Ebiquity’s contract compliance experts), marketing transparency is less of an end-state and more of a journey, unique to an Advertiser’s specific agency ecosystem. The most recent refresh to ANA’s media buying master services agreement template – launched earlier this month – should be a topic of conversation between Advertisers and their Agency partners in the US to ensure they are making progress on their shared transparency objectives.

Now, before you get this topic on the agenda for your next meeting, here’s our recap of big-ticket items in this version 3.0 of the template:

NEW AND IMPROVED DEFINITIONS.

Significant effort has gone into clarifying MSA definitions with the intent to be more prescriptive.

Let’s start with Audits. The 2018 update intentionally did not differentiate between audit types, but this new template has separate definitions for a Performance Audit and a Compliance Audit. It’s a positive sign of the industry becoming more aware of the various transparency instruments available to advertisers. It’s also an opportunity for advertisers to think more tactically about the approach, cadence, and objectives for each.

Contrived Service Agreements are here to remind us of all that “Services provided as a premium” – the terminology in the 2018 version – may be a bit too abstract and colorful to describe an ongoing transparency pain point that is becoming more acute as marketplace relationships get more complex. The new definition explicitly calls out those relationships between agencies and vendors that act as a conduit for higher-than-market-value goods and services, which can be perceived as a form of rebates and incentives, extending beyond volume-based arrangements. It should set Clients and Agencies up for a more focused conversation on advertiser-attributed incentives and the required disclosures that Advertisers should expect.

And speaking of marketplace transparency, the new Related Party definition now includes companies that are not Agency Affiliates in legal terms but where the Agency may have a financial or other material interest. This broadened definition gives Advertisers visibility into more entities purchasing media on their behalf and the financial rules governing those buys. In real-life applications, we may see entire vendor groups re-categorized as Related Parties, in turn re-classifying what an allowable pass-through cost is for them.

NON-TRANSPARENT SERVICES GET THEIR OWN SECTION.

You can sense the frustration of ANA’s members caused by the lack of upfront transparency and blanket audit rights restrictions on this ever-increasing bucket of media agency services. The ANA has drafted a list of requirements (see here) to ensure that very little is left up for interpretation. Advertisers often sacrifice too much visibility for the value of non-transparent services. The new section delivers on this front by explicitly giving Advertisers transparency/audit rights to any non-transparent services purchased without proper authorization. It creates the opportunity to gain visibility into proof of appearance and to provide assurance that services were rendered from a financial compliance perspective.

DIGITAL MEDIA REQUIREMENTS GET THEIR OWN SCHEDULE.

As a sign of the collective whiplash we’ve all experienced from the ongoing shifts in digital media activation, verification, and measurement, the ANA has reorganized all specific terms, standards, and requirements in a separate schedule. This is more of a practical move, as it should be easier to amend. Definitions have been clarified, and ANA has also added its recommendations for agency requirements. In addition to operational requirements, the new schedule includes commercial implications of non-compliance, such as the Agency not receiving its fees if it places client ads on Exclusion List sites.

AI, DE&I, ESG GET PLACEHOLDERS

Though little substance is provided, the ANA conceived sections as initial suggestions for advertisers to consider.  Marketers should consider if and when appropriate to build into future agreements and depth of requirements.

LOOKING BEYOND THE BASELINE

The above and the entirety of the updates made to the template should be seen as a common denominator of sorts – a signal from the ANA on what could be an acceptable baseline. For the advertisers out there, who are further into their transparency journey and would like to see beyond the baseline, here’s what we wished to see in this template and any media agency contract:

Transaction Data Retention Policies. While the template does introduce a key principle that the Advertiser should have the same access to their digital media transactions data as the Agency, it stops short of clarifying operational implications. Data loss due to retention policies for digital media transactions remains a barrier to transparency exercises in this space.

Non-Transparent / Principal Transactions. The new section is a welcome improvement. But it’s good governance hygiene for Advertisers and Agencies to align on and document that non-transparent media should (1) have been acquired in advance at the agency's own risk; (2) it should present a saving to the client over a direct/transparent buy, and finally (3) it should be supported by an internal invoice from the agency's buying division. While pricing transparency may be off the table for non-transparent transactions, alternative avenues should be explored to bring as much visibility as possible. As the share of non-transparent services grows in the market, this issue may represent the most significant transparency implications for media visibility.

Media Performance Commitments.  Though not explicit in the ANA template, many of our clients choose to document additional agreements related to media performance such as pricing/savings guarantees, governance/stewardship requirements, etc.

Please do not hesitate to reach out to Ardit Bejko, Managing Director North America and Park Thomas, Audit Director if you have any questions. Contact us here.