Ad Agency Cut as Unilever Crowdsources Its Creative

Two and a half years ago, we took to task Five Point Productions, of Cary North Carolina, for their ill-advised free contribution and boasting of the $13 cost to produce a commercial for Doritos' Superbowl commercial (Free photos (and $13 Superbowl ads, 2/1/07), since then, the highlights of their work have been a weak ad for Trans World Radio, a PSA for a radio station, and they continue to use their footage of a promo they did for a local wedding chapel, that we wrote about 18 months ago in our follow-up piece "Superbowl Suckers - One Year Later, 2/3/08. Yet, Doritos continues to milk the concept, touting their successes here. So, let's see - Doritos wins, everyone else gets a nifty t-shirt saying "I'm With Stupid", and an arrow pointing towards the collar area. Five Point learned what everyone that "works for photo credit" or "for the glory" does - doing that work does not pay off in more and better work - even when you are showcased in the Super Bowl ad lineup.

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Not to be outdone by the Doritos/Frito Lay parent company Pepsi Co, Unilever has upped the anty - firing their entire ad agency to crowdsourcing and a contest, as Advertising Age reports, in Don't Look Now, but the Crowd Might Just Steal Your Ad Account (9/14/09). Unilever's Chief Marketing Officer suggests that this crowdsourcing approach will translate into "outstanding" results, rather than just the "good" results he was getting from his agency, according to the article. In addition, as the article notes "the move to crowdsourcing saves on agency fees." Now, the entire effort has been taken internal, with no outside ad agency handling the media buy, or managing the contest.

Certainly, as entries are submitted, and presumably voted upon, the company's competition will know the direction of a strategic ad, so they can counter-program. Further, just as chinese "sweat shops" of World of Warcraft have sprung up to "farm gold", so too, could a rival agency, for just a few thousand dollars, outsource to Chinese computer users voting to promote the worst ad.

Unilever is penny-wise and pound-foolish here in this move. If they thought that the results from their current agency were just "good", they could have put out an RFP for a new agency to get "outstanding". This is, to say the least, a bone-headed move.

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iStockphoto Indemnifies Clients Up to $250k

iStockphoto has stepped up their efforts to woo wary would-be clients by indemnifying them in the event the client gets sued, according to this report by Cnet - iStockphoto seeks profit from others' legal worries - 9/15/09.

The free-wheeling days of free advertising photos being sourced from the likes of Flickr were brought back down to reality after the highly publicized case of Virgin Mobile being sued after they used a photograph of a young girl in their ads without a model release. ( MSNBC - Virgin Mobile sued over Flickr image used in ad, 9/20/07) Further complicating the matter, the photographer, who assigned a Creative Commons Attribution license, sued Creative Commons, because, as this article points out (Flickr User Sues Creative Commons Over License, 10/4/07) "According to the photographer, he didn't realize that by licensing his photos Attribution Only, he was agreeing to commercial uses like advertising....they [Creative Commons] were explicitly targeting non-legally-sophisticated users (i.e., separating their licenses into Human Readable and Legalese) and urging them to use CC's form licenses." The Virgin Mobile case is just one of many lawsuits that have caused a chilling effect for major corporations' willingness to use Flickr/et al images to save a few dollars on the front end only to be hit with big dollar settlement amounts in the end. The AP/Shepard Fairey case (The Associated Press v. Shepard Fairey, 2/4/09), is among others.

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In one report on a now locked iStockphoto forum thread by Craig Swatton reveals "I was speaking to someone who works in London for a major global firm and on my suggestion they were going to come here for images to put into a presentation but it turns out the firm's global policy explicitly bans istock (along with one of the other main competitor)."

In the iStockPhoto licensing agreement, as of September 15, 2009, it states, in part:

7. Limited Representations and Warranties

(a) The Site acts as an exchange of Content between those who provide Content to the Site and those who wish to use such Content. iStockphoto grants no rights and makes no warranties regarding the use of names, people, trademarks, trade dress, patented or copyrighted designs or works of art or architecture or other forms of intellectual property represented in any Content. While we have made reasonable efforts to correctly categorize and keyword the Content, iStockphoto does not warrant the accuracy of such information.

(b) THE CONTENT IS PROVIDED “AS IS” WITHOUT REPESENTATION, WARRANTY OR CONDITION OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO THE IMPLIED REPRESENTATIONS, WARRANTIES OR CONDITIONS OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE. ISTOCKPHOTO DOES NOT REPRESENT OR WARRANT THAT THE CONTENT WILL MEET YOUR REQUIREMENTS OR THAT ITS USE WILL BE UNINTERRUPTED OR ERROR FREE. THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF THE CONTENT IS WITH YOU. SHOULD THE CONTENT PROVE DEFECTIVE, YOU (AND NOT ISTOCKPHOTO) ASSUME THE ENTIRE RISK AND COST OF ALL NECESSARY CORRECTIONS.

IN PARTICULAR AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, IF YOU ARE DOWNLOADING CONTENT THAT IS IN A FLASH FORMAT OR FILE (WHETHER .SWF OR OTHERWISE) ISTOCKPHOTO MAKES NO REPRESENTATION OR WARRANTY RESPECTING SUCH CONTENT WHATSOEVER, WHETHER AS TO OWNERSHIP, TECHNICAL OR LEGAL COMPLIANCE, OR OTHERWISE.

9. Indemnification

You agree to indemnify, defend and hold iStockphoto, its affiliates, its Content providers and their respective directors, officers, employees, shareholders, partners and agents (collectively, the “iStockphoto Parties”) harmless from and against any and all claims, liability, losses, damages, costs and expenses (including reasonable legal fees on a solicitor and client basis) incurred by any iStockphoto Party as a result of or in connection with any breach by you or anyone acting on your behalf of any of the terms of this Agreement.

Clearly, some actuary did the math and concluded that the likelihood of an image being used and then a lawsuit being brought was sufficient that they could include, as a part of your $1.00 license to use a photo, atleast $10,000 in insurance, and as much as $250,000 if you are a frequent user of iStockphoto. Likely, iStockphoto is not self-insuring against this, but rather has a specific policy to protect them in these cases.

Interesting, since the v1.2(d) edition of the Flickr/Getty contract, clause 5 says that the contributor:

"Each party represents and warrants to each other that it has the full power, authority, legal capacity and is of sufficient age to enter into the Agreement and perform its obligations hereunder...content will not infringe the copyright of any third party, and will not contain any subject matter which violates any applicable law or regulation and, if released, will not defame, violate the right of privacy or publicity, or infringe the trademark or other personal or property interests of the parties..."

The contract goes on, stipulating that

"Each Party (an "indemnitor") agrees to defend, indemnify, and hold harmless the other Party..." and then goes on "Getty Images shall not be liable for any punitive...damages...you shall bear sole responsibility for obtaining and maintaining adequate insurance for protection of Content. If, despite the above limitations, liability is imposed on Getty Images for any of these reasons, in not event shall Getty Images' liability exceed US$10,000 in the aggregate."

Thus, iStockphoto/Getty/et al are protected because once the end client says "hey, I just got sued for using one of your photos..." Getty will offer to settle up to $250k, and then, in turn, has every right to sue the hobbiest/soccer mom/amateur for whatever they had to spend, plus all their attributable legal fees for handling this. These issues will also likely be reasons for photos getting rejected because of trademarks in the content.

As more lawsuits are filed from Flickr/Creative Commons/Royalty-Free uses of photography, those willing to spend high dollars for pictures will continue to turn away more and more from the penny-stocks, with these tens of millions of images being relegated to school reports and uninformed mom-and-pop shops who don't know what they are - and are not - getting. Atleast they're getting insurance, for the time being.

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NYC Presentation Next Week: The Art of the Deal

Interested in knowing more about how to negotiate with your clients? How to more clearly license your work? Next Tuesday, 9/22, in the evening, I am presenting The Art of the Deal at Adorama, Sponsored by Nikon.

Here are the details:

The Adorama Building
42 West 18th Street - Between 5th and 6th Avenues
5th floor
New York, N.Y. 10011

Event Description:
Join John Harrington, author of the best-selling ‘Best Business Practices for Photographers’, for an insightful and solutions-oriented presentation on how to generate more revenue from the assignments, through pricing examples and discussion, negotiation strategies, and demystifying licensing of your work.

Unlock the mysteries surrounding how to price your work, and learn ways to negotiate from a position of strength. When it comes to licensing, how do you write a license that gives the client the permissions they paid for, without leaving loopholes you could drive a truck through?

Through a series of actual negotiated assignments, we will break down the negotiation and explain how to plan for the questions you'll get, and to know the best ways to answer them. When it comes to pricing, there seems to be a world of secrecy around rates. We will discuss solutions for stock and assignment pricing, as well as discuss tools for you to establish your own. When it comes to licensing, we'll discuss and explain the standardized licensing solution that is the Picture Universal Licensing System (or PLUS), and how to write a license, where to put the licensing language, and what the best format will be.Throughout the program, all of these elements will be integrated into each assignment discussed.

To attend or learn more, click here.

(Comments, if any, after the Jump)

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