Rebates, gouging and kickbacks are all common tensions within the media trading world, but advertisers and agencies want transparency. The World Federation of Advertisers has created a Transparency Index to shed light on the matter and Australia has come out as one of the most transparent media marketers in the world.
The WFA has developed the first Transparency Index, which it claims will help marketers identify and understand the points of tension in media trading such as rebates and agency volume bonuses.
It has ranked the top 20 media marketers globally in terms of how transparent the media relationships between agencies and clients are.
Australia scores in the second top bracket with between 80 and 89 points on the scale. It sits alongside the UK, US and South Africa. Canada, France and Scandinavia score in the highest bracket.
China comes at the bottom of the table, with arbitrage high across agency trading desks where WFA claims there can be thousands of intermediaries between advertisers investing and the consumer seeing the ad. Japan is close behind, its low ranking driven by the perception that up to 75% of rebates are retained by agencies rather than passed back to clients.
The WFA believes that most transparency concerns have moved beyond individual client agency relationships and now sit at the holding company level.
Programmatic is adding to the concern with the increased number of parties in the supply chain increasing the scope for arbitrage and less transparent relationships.
Matt Green, senior marketing communications manager at the WFA, told AdNews: "The reality is that Australia is a pretty transparent market with limited levels of rebates, low levels of brokerage, a trusted media audience measurement system and few issues with online video auditing.
What we do see is, like all the markets include in this study, Australia does suffer some issues with visibility into the digital supply chain and advertiser money-flows, and transparency issues with data."
France is the most transparent market, with rebates and discounts restricted by anti-corruption law Loi Sapin that came into force in the 90s.
Strict regulation isn't always the answer to reducing corruption and making the industry more transparent. Brazil, which is highly regulated with agency commission fixed at 20% and clients entitlement to rebates limited, was one of the least transparent markets, according to the WFA Index.
Rebate levels prompt the most red flags across all 20 of the markets but the intensity of the issue differs between countries. More mature markets including the UK and the US tend to be more transparent, but the Index found transparency doesn't necessarily meet better performance. In the US, it found viewability was lower than in some of the developing markets.
Green added “Ultimately the Transparency Index highlights current battles over transparency. Advertisers need to target the digital supply chain and their relationship with media holding companies to stay on top of the issue.”
The Index was developed with Ebiquity and Telemetry.
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