The US Association of National Advertisers (ANA) has criticised the “level of irresponsible behaviour of both agencies and advertisers”, urging its members to take control of media transparency by rewriting contracts, hiring a ‘chief media officer’ and undertaking thorough audits.
The recommendations come after an investigation by the ad body found that senior executives at agencies were aware and regularly mandated controversial practices often not disclosed to clients. These included cash rebates, rebates as inventory credits and ‘service agreements’ for non-media services such as consulting or research.
While rebates are common in many markets, including the UK, in the US they are not allowed. Most media buying is handled by six main holding companies – WPP, Havas, Omnicom, IPG, Publicis and Dentsu-Aegis – all of which have denied any wrongdoing.
Easing client/agency tensions
The new guidelines, from Ebiquity/FirmDecisions on behalf of the ANA, are designed to help marketers looking to ease the tension with their agencies. They suggest marketers should require media agencies to be fully transparent to elevate trust and restore confidence in the client/agency partnership.
They also recommend clients require their agencies to disclose all potential conflicts of interest and allow thorough audits of the agency, its parent company, affiliates and subsidiaries to ensure full transparency and contract compliance.
The ANA has drawn up a new contract that it believes all advertisers should be using. It is based on a similar contract from the UK’s ISBA, which includes details around viewability, brand safety and click fraud that it says was previously missing and allowed agencies to profit in these areas.
Read more: Why agencies’ reluctance to talk about rebates is making marketers nervous
An accompanying report (titled Media Transparency: Prescriptions, Principles and Processes for Advertisers) meanwhile, has recommended “greater rigour” in the contract development process and governance to always be stewarded by a “chief media officer”.
This chief media officer should serve as a centralised internal resource to oversee media strategy, partner with external agencies, and work with third-party suppliers to optimise the media mix and share best practices across teams.
“Advertisers are now experiencing a unique environment where demands for financial accountability and ROI are increasingly high, while transparency into media spending is difficult to achieve,” says Michael Karg, group CEO of Ebiquity.
“We’re at a turning point in the US advertising industry. With these recommendations, advertisers have the opportunity to pave the way towards greater transparency while laying a strong foundation to manage future complexity.”
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