The IPA and APA have today announced a series of changes to the industry standard Advertising Production Agreement, which is made up of the Production Insurance Briefing Specification (known as the PIBS) and a set of Contract Terms. The new, updated documents will be introduced for use between agencies and production houses from 04 June.
THE ROLE OF THE PIBS CONTRACT
PIBS has long been the industry standard production contract, sitting between the agency and the production facility, its main function is to agree the details of the shoot (date, location, specifications, format and instructions regarding filming equipment, insurance etc) and, importantly, the cancellation terms that will kick in should the client instruct the agency to cancel.
The updates, which were made with the assistance of ISBA, were initiated so they could also be used for filmed content in media channels other than TV. The documents are now suitable for use with films created in digital formats and for online, not just broadcast media.
The update includes a number of other changes, most of which clients will not need to be aware of, but one area will have specific implications for clients and that is the production cancellation provisions i.e. the related fees/charges for cancelled productions.
While cancellation provisions have always existed within the PIBS document and clients have always had to pay cancellation fees, the existing PIBS contract was unclear and ambiguous. The new terms have outlined a number of changes specific to cancellations and the related fees/charges for cancelled productions.
All advertisers need to be aware of the new cancellation terms, which include:
- Cancellation fees are charged based on the period between notice of cancellation and intended shoot date
- Fees range from 25% (20+ days before the shoot) to 100% (if cancelled 10 days or less before the shoot date)
- Clients will also be liable for Director and Producer's fees upon cancellation (percentages as above)
View the full set of cancellation terms here >
ISBA's Consultancy & Best Practice Manager, Traci Dunne, noted that it "was important ISBA was involved in the process to update the Advertising Production Agreement so that we were able to consider the impact on our members and ensure they understood the implications ahead of the launch. We have hosted a series of events and developed a supporting suite of information around client management of the production process available to all ISBA members. It is essential both marketing and procurement teams are aware of the production processes their agencies are managing on their behalf.”
The updated terms will come into effect on 04 June and we recommend you:
- Talk to your agencies about the production process, specifically around approvals and cancellations, and review the procedure if necessary. You should also ensure that all those involved in commissioning productions understand the process, the cancellation provisions and the consequences of cancellation. Please see the Production Approval Process joint industry guidance that will be launched with the new terms for more information.
- Review your Creative Services Contract to reflect these new provisions. ISBA and the IPA have updated the production-related clauses in the creative services contracts which state that the cancellation policy has to be provided to the client in advance. The updated production cancellations clauses are 9.5 and 14.2. Request the new version of the creative services contract (which also contain updated GDPR clauses) here.
For more information on any aspect of the above, please contact Traci Dunne.