Editorial

Get it in writingThe Ontario Court's 24-page judgment by Madame Justice Kathryn Feldman ordering Mr. Submarine to pay twice for commercials aired on CFTO-TV in the fall of 1989, despite Mr. Submarine having already paid the now-defunct Deane Advertising for them,...

Get it in writing

The Ontario Court’s 24-page judgment by Madame Justice Kathryn Feldman ordering Mr. Submarine to pay twice for commercials aired on CFTO-TV in the fall of 1989, despite Mr. Submarine having already paid the now-defunct Deane Advertising for them, may or may not set a legal precedent.

However, it is impossible to dispute that the judge’s Nov. 19 ruling is a highly salutary lesson for the media, advertisers and their agencies and they ignore it at their peril. Not because of its legal argument, although we suspect many in-house counsel are staying later than usual at the office because of it, but because of its implied argument.

Simply, the traditions which began when advertising agencies were agents of the media and sold space on their behalf, and which have served as the basis for media buying and selling since then, are obsolete.

An industry which has a turnover of $8 billion to $10 billion a year, depending on who is doing the estimating, can no longer muddle through; can no longer operate on quick telephone calls, contracts on the backs of envelopes, and slipshod credit reporting. The time has come for what might be called a contractual grid to be accepted by all media providers, advertisers and their agencies.

Of course, shallow arguments about a business having the right to run its affairs as it sees fit will be advanced; and those with special interests or special arrangements or turf to defend will rush to deny that drastic remedial action is required. But the fact remains, the time has come for tradition and traditional animosities to be set aside for such sound reasons as cost, efficiency, clarity and purpose.

What this proposed contractual grid may finally comprise is best left to the interested parties to decide, but some of its elements, in no particular order, seem intuitively obvious.

The first is a reliable credit reporting agency; a sort of creditworthiness clearing house open to all bona fide industry interests. A printer could use it to check on an agency; an agency could use it to find out about an advertiser; a broadcaster could use it to assess a media buying agency or service. Any such credit agency would, no doubt, cause a few eyebrows to shoot up over the relative merits or demerits of the party being checked. But must it be pointed out an unpleasant surprise before a contract is signed is much less traumatizing than a surprise after things are on paper.

Second, advertisers at least should insist that their contracts with agencies contain random audit clauses. Not because all advertising agencies are careless or calculating, but because the clauses would dispel any lingering suspicion that media funds paid in good faith are not being used as a float or, worse, to earn interest in short-term investments.

Next, and although there may be no such thing as a standard contract in law, real world guidelines might be adopted to put to rest the threat of dual liability. They could state categorically who is responsible for paying what; when payment must be made; and who is responsible should a contractor default.

With billions of dollars at stake, not to mention the immediate fate of many cash-strapped companies, it makes no sense at all to rely on the imprecision of antiquated custom.