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Over the last 18 months, much of our time has been focused on helping members drive new standards of practice in media agency contracts and building member confidence that new terms can be agreed with both network and independent agencies.
The new Framework Media Services Contract template we launched in April 2016 was an initiative designed to enhance our members’ ability to trade on a transparent basis with their media agency partners. The terms enable further understanding of the digital ecosystem, ensure digital standards are discussed with the agency and that policy is set and enshrined in contracts. The template contract requires agencies to be clear on their role and responsibilities in handling the media bought and budgets managed on behalf of client’s.
A recent review of how ISBA members are using the contract in practice has revealed some positive details that will boost the confidence of any advertiser looking to use the terms to inform their own media agency negotiations.
Various myths have abounded since the contract was launched like ‘agencies belonging to networks will not sign up to these terms’ and ‘only small advertisers will use the contract’….well these myths have now been busted by our usage review!
Our review revealed £6.1b worth of ISBA member media spend as having either already been renegotiated (27 organisations spending £1.67b already completed negotiations) or that will be renegotiated (18 companies with £4.5b spend) in the near future, the next 12 months. The review indicates that the terms are being adopted by some of the biggest advertisers.
And furthermore it indicated that terms can be agreed with network agencies, the majority of the negotiations reported on were with agencies belonging to major networks, 96% of those who have negotiated new terms already, and 81% of those who plan to renegotiate in the near future. So that’s two myths busted!
As well as being used locally, the contract is being adapted to create terms that are international in scope and not just relevant in the UK; in 50% of cases, the terms had been used, by those who had already renegotiated, to help create contracts that were international in scope. And two-thirds of those planning to use the terms in the future indicated that they were using them to create international terms or MSAs.
Of course, not everything in negotiations was plain sailing and compromises had to be made in just under half of the cases reported on, but this is a scenario to be expected in any commercial contract negotiation.
There were no surprises on areas of contention in the contract, the agency community pushing back on most clauses related to greater visibility and transparency. However, there were also a sizeable number agencies reported on who had no issues with these clauses.
Our review of use of the ISBA framework media contract contains a great deal more insight for anyone interested in using the terms, including make-up of negotiating teams, whether external help was used, time taken to negotiate, contentious clauses, shared learnings and much more, if you’d like a copy and to understand more about how the contract can help you transform commercial relationships with your media agencies, do get in touch.
Significant progress is being made by ISBA members in their conversations on enhancing contracts with their media agencies and your organisation too could be benefiting from more transparent better-managed terms.
Don’t just take our word for it, listen to your peers: “The ISBA template media agency contract was a great checklist to ensure all aspects of the deal were covered. It helped change the way our internal legal team approached the format of the contract and gave additional credibility to the procurement process” Procurement, £46m spend
To request a copy of the review contact me.
Director of Consultancy & best Practice, ISBA
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