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Omnicom’s OMD unit changing the wording of insertion orders it sends to the media, making them accountable to repay the agency anytime the agency repays its clients for buys it has made.
Most media outlets hold both agencies and their clients liable for paying the advertising buys they make, regardless of who defaults, Mediapost reports.
A credit executive at Raycom Media first noticed the new language coming from OMD in insertion orders for buys made on behalf of GE and Nissan. OMD has since added it to buys made for Dial.
“If other agencies see OMD doing this, they may follow suit,” said one Madison Avenue executive, noting that most agencies have yet to become aware of OMD’s move.
The question is why now? It’s not clear whether there have been changes in the liability agreements between OMD and its clients or if OMD has noticed a problem with a blue chip client. The last significant liability debate between Madison Avenue and the media industry occurred during the 1990s, following an economic recession, a pronounced advertising downturn, and some high profile bankruptcies.
Other Omnicom articles:
Dodge’s Charger Muscles in on Web
Ads Plus Integration Equals Big Lift
British Airways Picks Final Four
Omnicom Wins Bank of America Account
Motorola Chooses Omnicom Over Ogilvy
Omnicom Group Agencies Win $315 Million Lowe’s Account
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