Do your ad contracts require you to provide proof of performance?  Make sure you you comply with proof of performance terms or you may not be able to collect.  Here’s a fascinating outdoor advertising proof of performance case.

• Bacci Pizza Group signed an advertising contract in 2009 with the Illinois outdoor advertising company Paramount Media Group to buy 10 seconds of advertising each minute  for a three month period on a digital billboard.

• The ad contract required Paramount to provide the advertiser with a certified Proof of Play report from the digital sign maker once a month.

• The ad was run.  Paramount’s owner looked at the sign periodically to make sure the ad was running.   The pizza company’s owner indicated that the advertisement looked good.  The pizza company did not pay for the ad.

• Paramount sued for collection.  Paramount and the pizza company both confirmed that the ad ran on the digital billboard.  The pizza company refused to pay on the grounds that no proof of play report was provided so the contract was invalid.

• The Court sustained the pizza company’s position that the contract was invalid because no proof of play reports had been delivered to the company.  The Court also refused to accept a software printout showing that the ad had run because the printout had not been ordered directly from the sign manufacturer as the ad contract stipulated.  The ruling was upheld by the Second District of Illinois Appeals court.

Insider’s take: Make sure you follow the proof of performance clause in your ad contracts to the letter or you may have collection issues.  You also should review your proof of performance clauses to make sure that they are simple.  “A proof of play report certified by a digital sign manufacturer” is harder to fulfill than “a  certified computer printout from Outdoor Advertiser’s digital billboard scheduling software demonstrating that a digital ad has been played.”

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