Had these retirees not believed Omnicom’s promise of health insurance coverage until age 65, many would have bought personal policies when they were ten 10 or 15 years younger. Now they are faced with buying coverage to make it to Medicare–five or more years away– at an age when insurance is much more difficult and costly to get.

They didn’t leave their older, ex-employees empty handed though; they provided them with the e-mail address of an online insurance company.

Count your fingers after you shake an Omnicom hand–better wash it, too.

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OK, let’s see a show of hands …. who among us is doing a 6 figure job without the client signing a Master Services Agreement? Ok, good. Second … who among us will shoot a 6 figure job while financing your client’s client without guarantee of payment for out of pocket expenses? Hmmmm, I’m not seeing all hands raised. That’s way too risky. Time to rethink if that is your S.O.P. Seriously folks, does this even require thought?

Also, fronting 30K in expenses, is just crazy. I don’t know any business owner willing to do that in any business except loaning. Where is the collateral?

I would never agree to those terms. I don’t care who the client is… I’ll take a hike.

Few agencies pay you until they get paid by the client. Admittedly, this does mean photographers get the shaft in having to front for shoots where as a copywriter should hopefully have paid for their word processor and their internet service.

I know Omnicom (Which is what? The 2nd largest holding company?) has a big stake in lots of agencies, and those agencies aren’t making nearly what they used to because, well, no one’s buying or giving anymore. So they’re definitely feeling the hurt (I know several people at Omnicom agencies that have started grinding their teeth to stubs). But it’s not just them being evil/greedy. Plenty of other agencies have had to start doing this because–they just don’t have the cash. All of these places run so hot on overhead that until they get it from an agency–they don’t have it.

Maybe once things cool down and banks start making more sense (here’s hoping) then a newer, more stable and less insane business model will emerge. Until then, us freelancers have to take serious stock of what we can and cannot afford, and hope our credit cards can keep us afloat for those 60-75 days (I have had payment held up to 120 days before, it’s sick).

APA on Omnicom statement…”our policy has not changed”

The last week has seen ever-increasing concern and anger in the advertising community concerning a change in the way the Omnicom Group and its subsidiaries conduct business between Omnicom subsidiaries and suppliers.  Advertising Photographers of America (APA) reached out for comment from the Omnicom Group about the crisis.  With the Omnicom Group being the world’s largest advertising holding company, a change in terms and conditions affects the advertising community on so many levels.  The policy of concern is called Sequential Liability.  Sequential Liability simply means that the agency only pays the suppliers after it has been paid.

Quoted from The Association of Independent Commercial Producers (AICP) published guidelines dealing with this trend:

“Certain agencies have inserted a Sequential Liability clause in their contracts. Others have added a side letter to be signed by the production company. Still other agency contracts do not overtly refer to Sequential Liability as being in effect, but do refer to the agency “acting as agent for” (the advertiser), which suggests the same thing.

If the agency is requesting the recognitions of a “principal-agent” relationship, then the client (principal) should not be released from the obligation of payment until total payment is made to the production company. It should be clarified that even if the client pays the agency, the client remains liable if the agent defaults in fulfilling the payment obligation.

Sequential Liability means that the agency as agent for its principal, the advertiser, is liable for payment to the production company only if the advertiser has paid the agency; otherwise the advertiser is directly responsible for the payment.”

On Thursday, March 20, 2009, at 11:47 AM, APA spoke with Pat Sloan, Omnicom Director of Public Relations, to express the concerns of APA and others to the
opposition of this policy.  APA members are not able to finance major advertising projects and these terms and conditions are not acceptable.  Director Sloan’s statement is that there has been no change to their policy on this matter.

Sequential Liability has been policy in the industry for many years.  The reality is that advertising agencies, many are Omnicom’s subsidiaries, have provided advances and credit to production companies and photographers to begin awarded projects with substantial expense.  “Business as usual” must continue was stated to Director Sloan.  APA members, independent photographers and small business owners, are not in a position to finance commercial projects of possibly hundreds of thousands of dollars.

APA business practices have long promoted the inclusion of “statements of intent” to receive 50% to 100% of expenses before the start of a job.  It is imperative that this practice continues without removal of advances by clients.  Photographers should also include that the photographer owns the copyright and any license agreement must be paid before the release of images.

As creators of intellectual property, photographers hold the copyright on their images.  It is imperative that registration of images be immediately submitted to the U.S. Copyright Office.  Copyright law and licensing agreements with your clients provide you strong legal protection.  APA recommends legal action only as a last resort but registration is needed to recover statutory damages and legal fees.

We must stand together and confront these terms and conditions because they are not in the best interest of photographers and their community of support.  If even one accepts them, it will cascade and the role of advertising photographer will change to one of being a financial institution or bank for clients.  We must not go down that heavily liable road.

The Omnicom Director of PR did promise to recommend a meeting to discuss these matters.  It is APA’s hope that a meeting will be arranged and discussions will continue to a successful resolution.

As previously stated, BE CAUTIOUS and don’t be afraid to walk away.  We must stand together.

Stephen Best