February 26, 2001

The American Association of Advertising Agencies (AAAA) and the Internet Advertising Bureau (IAB) issued proposed contract terms and conditions for agencies and Internet media companies in connection with the ordering and placement of advertising on the World Wide Web.

The voluntary "Terms and Conditions for Internet Advertising," posted on both organizations’ Web sites (www.iab.net and www.aaaa.org), cover ads served by media companies. The two associations will meet in the near future to address issues specific to ads served by third party ad servers.

The Terms and Conditions were developed by a task force consisting of AAAA and IAB members, as well as agency representatives from the Aspen Group and the New Media Coalition. This document is intended to provide a means of assisting contracting parties in the sometimes-fractious process of Internet media buying.

"One of the key objectives for the IAB is to simplify and make easier the buying and selling of interactive advertising for both media companies and agencies, and our work with the AAAA is one of the first steps in that process," said IAB CEO Robin Webster. "Our two organizations have been committed to creating the template which will most benefit our respective memberships, and this is a giant step forward in that direction."

"This initiative has been in the works for a long time," said Mike Donahue, AAAA executive VP, member services. "This document representing both agencies and Internet media companies is a great coup for all—the Terms and Conditions are a first step in simplifying an often disorganized space."

This document covers a range of issues including insertion orders, ad placement and positioning, payment liability, cancellation policies, makegoods, indemnification, privacy, and more. Agencies and Internet media companies can accept the Terms and Conditions as written, modify them to suit a particular situation, or choose not to follow them.

Some of the key issues addressed are:

Advertisers, agencies, and media companies shall post and comply with their company’s privacy policies.

Ownership of personally identifiable information (PII) should be clearly spelled out in the Insertion Order.

An agency cannot cancel a campaign 30 days or less prior to the start date, and the first 30 days of a campaign are firm.

Effective on the 16th day of the campaign, an agency may give 14 days written notice of cancellation.

One of the Terms and Conditions addressed is sequential liability, an issue that traditionally has sparked spirited debate between media companies and agencies. The AAAA has steadfastly argued in favor of sequential liability—in which agencies cannot be held liable for any media bills unless they have been compensated by their clients for the media buy—since the policy was officially recommended by the AAAA in 1991. Until now, many media companies had been unwilling to accept sequential liability, but given the circumstances outlined in the Terms and Conditions, the IAB has agreed to recommend it to its members.

The AAAA and IAB are urging their members and media companies who agree to the terms and conditions to attach them to future insertion orders.

About the IAB

Founded in 1996, the IAB is the industry’s leading online advertising association. Its activities include evaluating and recommending standards and practices, fielding research to document the effectiveness of the online medium and educating the advertising industry about the use of online advertising. Current membership includes companies that are actively engaged in the sale of Internet advertising. Associate membership includes companies that support advertising, such as interactive advertising agencies, measurement companies, research suppliers, technology suppliers, traffic companies, and other organizations from related industries.

About the AAAA

The American Association of Advertising Agencies is the national trade association of the advertising agency business. The 1,225 member agency offices it serves in the U.S., employ 65,000 people, offer a wide range of marketing communications services, and place 75 percent of all national advertising. Founded in 1917, the AAAA is a management-oriented association that helps its members build their businesses and acts as the ad agency industry’s spokesman with government, media, and the public sector.

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