In the world of digital advertising and marketing, industry professionals navigate a labyrinth of diverse participants, complex business arrangements, and intricate data flows. Amidst this complexity, the industry grapples with an array of multifaceted and differing contracts. The quest for standardized terms and conditions, adaptable to the variety of business relationships within this space, has long been an aspirational objective. While previous industry Standard Terms and Conditions (Version. 3.0) have served the industry well over the years in connection with direct deals, the time has come for new terms and conditions that address programmatic advertising and the multitude of other business use cases, which have evolved over the years.
The Journey So Far
The industry’s journey toward standardization began in May 2001 with the introduction of voluntary, standardized terms and conditions for direct online media buys between advertisers or agencies and publishers. Version 2.0, as these terms were called, evolved into the current version released in 2010 (Version 3.0). Now, more than a decade later, how most digital media buys occur (i.e. programmatic buying), is fundamentally different from direct deals, resulting in the Terms and Conditions being rendered inapplicable or resulting in lengthy and complex riders.
Starting in 2017, IAB has embarked on a “listening tour,” as well as an industry survey, and the feedback was clear: the top priorities were privacy and the overhaul of industry Terms and Conditions.
Unraveling Today’s Challenges
Over the next several years, IAB convened multiple meetings, conferences, and working groups, as well as conducted several comprehensive surveys to analyze and assess the contractual landscape. This exploration highlighted several challenges:
- Diverse Ecosystem: The digital advertising market is a behemoth, comprising various entities such as advertisers, agencies, trading desks, demand-side platforms (DSPs), exchanges, supply-side platforms (SSPs), publishers, ad servers, measurement and analytics providers, data management platforms (DMPs) and data aggregators, data suppliers, tag management vendors, creative optimization vendors, retargeting vendors, ad networks, and verification vendors. Typically, each of these parties has its form of contract, leading to friction in the contracting process. Standardizing these terms is a challenging but necessary endeavor to achieve efficiency.
- Complex Data Issues: The complex data flows in digital advertising, especially within programmatic realms, complicate contractual agreements. The existing ‘Non-Disclosure, Data Ownership, Privacy and Laws’ (Section XII), of the Terms and Conditions 3.0, although useful in the early days of direct buys, has become antiquated and largely inapplicable, prompting parties to frequently amend contracts, particularly concerning data flows and related rights and obligations.
- Lack of Common Definitions: The industry faces the ongoing challenge of inconsistent terminology, further complicating contractual processes. Establishing a unified set of definitions is crucial for clarity and consistency.
The Path Forward
Guided by the IAB Measurement, Addressability, and Data Center and the IAB Legal Affairs Council, the IAB Terms & Conditions Task Force has been assembled to create a standardized set of terms and conditions to comprehensively address the challenges outlined above. The task force includes representatives from across the entire advertising ecosystem, ranging from small organizations to large holding companies, and includes brands, agencies, publishers, ad tech platforms, data solutions providers, and law firms. The individuals at the helm are those who are directly involved in the negotiation, drafting, reviewing, and/or approval of digital advertising contracts.
This team, including representatives from the entire advertising spectrum, will be drafting core terms that apply across the various commercial transactions within the digital advertising industry. Such core terms may include definitions, payment terms, reporting, term and termination, force majeure, representations and warranties, indemnification, limitation of liability, confidentiality, and general terms, such as assignment, severability, notices, and waivers.
Following the completion of such core terms, the task force will likely begin drafting various addenda that will sit on top of (i.e., be governed by) the core terms and apply to specific transaction types. For example, there may be an addendum that applies to an advertiser engaging its DSP and a different addendum when a publisher engages its SSP.
Recognizing the challenge of drafting to these multiple business use cases and transaction types, the task force will, by necessity, draft these addenda over a period of time. And, the core terms and addenda will be crafted in a way that allows each party to customize them for their unique contracting needs.
Join the Movement
The current momentum for standardization, along with the dynamic nature of the data economy, heralds a unique opportunity. It is a call to action for the advertising community to unite, reassess, and collaboratively steer towards a streamlined future.
For those driven be part of IAB’s efforts to shape the future of industry contracts, we invite you to join the IAB Terms & Conditions Task Force by signing up here.