How to Negotiate Digital Media Ad IO's (Insertion Orders); 7 Legal Issues in Digital Media Advertising Agreements

The Ultimate Guide to Negotiating IOs

Many advertising agreements use a contract called an "insertion orders" or "IOs", because you are submitting an "order" to "insert" ads into media content.

Many IO’s are governed by the industry standard IO terms: the IAB/AAAA Standard Terms and Conditions for Internet Advertising for Media Buys One Year or Less (also known as the “Standard Ad Terms”). Buyers and sellers often use the Standard Ad Terms as the baseline contract or IO, then add an additional RIDER for additional terms or amendments thereto.

(NOTE: Some large media companies or big social media platforms have their own contracts that do not use the Standard Ad Terms. This article still applies, regarding what terms other than the typical baseline should be modified, whether starting from the Standard Ad Terms or a more customized advertising agreement.)

The issues you care most about, and the language you will want to include, will depend on your role in the transaction.

If you are the Advertiser (or Agency) buying the ads, you will want to try to include terms like the following in your IO Rider: 

1.      You may want to consider certain editorial requirements, e.g.,

a.     Media Company will use commercially reasonable efforts to evenly distribute impressions over the course of the campaign (where applicable).

b.     Editorial Adjacency – should not appear near inappropriate content – for example, you don’t want your airline travel ad to appear next to an article about a recent plane crash

2.      You will only pay for appropriate impressions. For example, you may want to exclude

a.     inventory not targeted to United States IP addresses.

b.     Click fraud or non-human traffic or bots.

c.     Unviewable (in whole or in part) impressions (example, if a video, only if the full video plays; for images, only if all pixels load)

3.      Ad Server. You can use a mutually agreed third party ad server, for ad serving and tracking and reporting, and you reserve the right to reasonably dispute any traffic reports from the publisher.

4.      You may use tracking technology on ads for collecting and tracking user data, consistent with law and applicable privacy policies. 

5.      Media Company will comply with applicable laws (e.g., privacy laws, etc.)

6.      Makegoods. If the publisher fails to deliver on any required promotions they will deliver makegoods – and you get to mutually agree and approve over what makegood inventory you get.

7.      Added Indemnification for:

a.     the content of the Sites in which Advertiser’s Ads appear,

b.     any content or materials provided by Media Company’s (eg artwork, ad content, etc.) – does not infringe, etc.

c.     compliance with laws (including privacy laws)

d.     breach of confidentiality

If you are the Media Company / Publisher or other Seller of the Ad Inventory, you may prefer adding terms addressing the following in your IO Rider:

1.     Advertiser must meet reasonable deadlines for approvals (review of artwork and ad copy, sending you artwork in the right formats on time, etc.) 

2.     Delays that occur outside your control are not your fault. For example, if the Advertiser doesn’t approve artwork or ad copy on time, and you cannot run the ads, they still have to pay for your resulting unused ad inventory. 

3.     There are certain things you can try to do but cannot guarantee, if the advertise asks, for example, you cannot guarantee 100% even delivery of impressions without ebbs and flows based on traffic or seasonality, you can’t guarantee editorial adjacency requests, you don’t control whether international viewers might access the ads, etc.

4.     No refunds (except possibly in rare circumstances where you are in breach)

5.     Makegoods. You’ll deliver makegoods, but not a refund, if you fail deliver on any requirements and it was your fault (no makegoods if it wasn’t your fault). Makegoods will consist of anything or reasonably similar value.

6.     Advertiser will comply with all applicable laws, including privacy laws (how they collect and use data), and, if applicable, any “Native Advertising” laws and guidelines. This means any ads that could look like content are clearly marked as advertising.

7.     FYI, the Advertiser indemnifying you for illegal or infringing content in their ads is already covered in the Standard Ad Terms.

 -------------

If you are an Agency, you will also want to add that you are not responsible for the Advertiser's misdeeds or failure to pay.

 ___________________________________

This article is not a substitute for legal advice; Consult a lawyer.

Brian Heller is a partner at Outside GC ( OGC ) , a different kind of virtual law firm. Brian is an experienced technology and deal attorney, specializing in SaaS licensing, Digital Media, Social Media, online advertising and other technology deals. You can reach Brian at  BHeller@OutsideGC.com or see his bio and learn more about him at www.outsidegc.com/attorney/brian-heller.