AAAA Spot Contract - Definition
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AAAA Spot Contract Definition
The AAAA spot contract refers to an American Association of Advertising Agencies standardized contract. It is a contract published by the American Association of Advertising Agencies, and it is used during the television or radio commercial spots purchase. Generally, the AAAA spot contract transaction is usually between the TV or radio station, and the advertising agency representing the client.
A Little More on What is a AAAA Spot Contract
The AAAA spot contracts details entail relevant purchase information including, commercial spot number, and the advertising campaigns time span. The contract also points out the commercial spots date and airing time. The airing period in this case can be on a daily , a weekly or on a monthly basis. Advertisers cost details are also included in the contract. Note that AAAA spot contract targets a specific geographical region.
Example of a AAAA Spot Contract
Assuming that advertiser ABC wants to purchase a 1 minute airing time for a commercial slot for its advertisement. In this case, it will opt for individual commercial spots being offered on different network channels, instead of purchasing the whole duration time from an already established network.
AAAA Spot Contract Types
There are various types of the AAAA spot contract as provided by the American Association of Advertising Agencies (AAAA). They are as follows:
- Place-Based Media- The details in the contract include venue details, format, market location, number, and commercial length among others.
- Local Television Confirmation- The contract consists of fields day, time, spot length, effective date, spots per week, the total number of commercials, cost per commercial and the overall advertising costs.
- Internet Advertising Terms, and Conditions
- Magazine Contract, and Insertion Order
- Transit Advertising
- Outdoor Bulletin Display
- Newspaper Contract/Space Order
- Outdoor Poster Display
- Local Audio Confirmation
Terms and Conditions that Apply to AAAA Spot Contract
Terms and condition of AAAA spot contract slightly differ from each other. However, majority of the terms and condition apply to all types of AAAA spot contract as shown below:
- Billing and payment-This highlights the amount to be paid, terms, and payment mode.
- Contract termination- It provides details of the terms and conditions under which a contract may be terminated (ended).
- Contract breach effect- This provides the right to end a contract in case any of the terms provided in the contract are breached.
- Telecasting failure- In case a broadcasting firm for a given reason is not able to air the commercial spot, this term states that it comes up with an alternative solution.
- Programs substitution- It gives a broadcaster the right to decide whether to air a commercial or not. It also offers a substitution rule.
- Program and commercial material- This term highlights in detail the responsibilities of each party i.e the advertising firm, the agency, and the person broadcasting (broadcaster).
- Broadcast liabilities- The term specifies how the broadcasting station will do the advert to save the agency and the advertiser from liabilities that are likely to arise from the advertisement.
- Advertisement streaming-This term forbids the contracted station from broadcasting a commercial on the internet or through streaming without the agencys approval or consent.
- General conditions and the disclosure-The term generally address issues such as licensing, care expected when managing agency or advertisers possessions. The term also addresses the list of rules available in the contract that govern transfer rights.
When to Use AAAA spot Contract
- AAAA spot contract is used when an advertiser wants to purchase commercials spots in an individual market instead of buying from network-affiliated stations.
Pros of Purchasing AAAA Spot Contract in Individual Market
- Processing AAAA spot contract is easier because of its standardized features. The features are clearly spelled out making it easier for parties to understand and process the contract.
- The process of purchasing AAAA is time-consuming as compared to buying all the stations affiliate network.
- Used when purchasing commercial spots in an individual market.
- The contract is between the TV or radio station, and the advertising agency representing the client.
- The AAAA spot contract targets a specific geographical area.
Reference for AAAA Spot Contract
https://www.investopedia.com/terms/a/aaaa-spot-contract.asphttps://www.mbaskool.com Concepts Finance and Economicshttps://financial-dictionary.thefreedictionary.com/AAAA+Spot+Contractwww.preciseinvestments.co.uk/definition-aaaa-spot-contract/www.financereference.com/
Academic Research on AAAA Spot Contract
Does government-restricted entry produce market power?: New evidence from the market for television advertising, Fournier, G. M., & Martin, D. L. (1983). The Bell Journal of Economics, 44-56. This article investigates whether government-restricted entry results in market power. The authors examine if television broadcasters can exercise substantial market power as a result of governmental entry restrictions. They estimate the hedonic equation that identifies product quality components of advertising sports using a sample of actual transactions prices. The model that the authors used reveal that there is a significant effect on prices of uncertainty in the delivery of audience, in the context of observed expectations of sellers and buyers. Using these transactional elements, the authors find that prices are unrelated to measures associated with market power. Bubbles, crashes, and endogenous expectations in experimental spot asset markets, Smith, V. L., Suchanek, G. L., & Williams, A. W. (1988). Econometrica: Journal of the Econometric Society, 1119-1151. Using experiments, this study assesses the bubbles, crashes, and endogenous expectations in an asset market. Smith, Suchanek, and William (1988) assert that spot asset trading can be studied in an environment where investors get equal dividends from a single probability distributor after every 30 trading periods. The findings reveal that 14 out of 22 experiments exhibit bubbles which are followed by crashes relative to the value of intrinsic dividend. With experienced traders, the bubbles reduce, but not eliminated. The authors also record regression of changes in the mean price of lagged excess bids, where excess bids refer to the measure of excess demand arising from homegrown capital gains expectations. The authors also interpret the bubble phenomenon as a form of temporary myopia as previously observed by Tirole (1982) in which agents learn that capital gains expectations can only be sustained temporarily, thereby inducing priors in the end. 4 out of the 22 experiments have also been found to yield outcome which appear to the chars eye as well as small price fluctuations. [PDF] The US treasury bill futures market and hypotheses regarding the term structure of interest rates, Chow, B. G. (1978). This paper tests the term structure hypotheses through comparison of interest rates term structure from the US Treasury Bill spot and features markets. The authors explain that market-generated interest rate expectations in T-bill futures market can be used to test such hypotheses, thus eliminating the role of model-generated expectations. The paper, thus, demonstrates the use of market-generated approach in testing the term structure hypotheses. The findings show that these tests do not substantiate the pure expectations hypothesis and the stationary variant of the market segmentation hypothesis. Econophysics to unravel the hidden dynamics of commodity markets, Levy-Carciente, S., Jaff, K., Londoo, F., Palm, T., Prez, M., Piango, M., & Reyes, P. (2006). In Practical Fruits of Econophysics (pp. 77-81). Springer, Tokyo. In this article, the authors used econophysic tools to evaluate five agricultural commodities traded at the NYBOT, both in price and volume. The authors suggest that the leading indicators of commodity markets are always commodity prices, but their dynamics are rarely understood. Findings show that there are differences in price and volume fluctuations among the commodities. Furthermore, all commodities were found to have high volatility, but non-random dynamic. Buying services and the media marketplace, Bogart, L. (2000). Journal of Advertising Research, 40(5), 37-41. This paper analyses the concept of buying services and media marketplaces. The author providers the historical development of media buying services in the US and Europe. The author also considers the changes witnessed in the media environment over the past 10 to 15 years, highlighting how they have impacted the media marketplace.