Business Press Attacks Sequential Liability: Crain Communications Praised for Its Stance
Sanderfoot, Alan E., Folio: the Magazine for Magazine Management
The trade press, having lagged behind in responding to the debate surrounding ad agencies' financial responsibility for paying for ad space, has finally caught up with other media groups. At the American Business Press's (ABP) recent fall conference in Chicago, trade publishers engaged in a heated discussion of sequential liability and what can be done to counter ad agencies' adoption of the policy.
In February, the American Association of Advertising Agencies (4As) revised its long-standing policy that declared agencies held sole liability for payment for ad space. In its place, the 4As adopted a non-binding policy recommending that members declare they won't be responsible for media costs until the agency itself is paid by the advertiser. Since then, the 4As has been defending that concept--sequential liability--against attacks from many media organizations, but not the ABP. "Of all the media associations, the ABP is the one I haven't heard from," says Burtch Drake, COO of the 4As.
ABP counsel Robert Saltzstein recommends, however, that publishers establish joint liability by having representatives of both the client and the agency sign the contract.
Steve Weiss, corporate credit manager for Miller Freeman Inc., says the business press should act in unison. "But I realize that some may not think that it's as serious as others do," he says. Weiss says he's recommending that top management in his company adopt a policy of joint liability.
One thing is certain: Publishers find sequential liability unacceptable, particularly at a time when the financial underpinnings of some of even the largest corporations are shaky. Because the policy diffuses liability, it forces publishers to credit check every advertiser, whereas now they need do checks only on agencies, they say. …