Agency holding companies slam ANA report

Publicis Groupe CEO Maurice Levy.

Agency holding groups have reacted angrily at an Association of National Advertisers (ANA) report that says media agencies lack transparency, are engaged in rebates and there exists a fundamental disconnect with clients. Other organisations welcomed the findings and wanted the industry to find a solution.

GroupM director of global communications David Grabert says the "objectivity" of the report's authors "needs to be examined carefully".

"The report should not be allowed to tarnish the entire industry, nor every company in it," Grabert says. 

"As we stated from the outset of the ANA’s exploration, GroupM does not seek, nor accept rebates or hidden revenues in any form from media partners in the US, nor do we accept service fees from vendors that are not disclosed to clients."

Grabert says GroupM is transparent with clients over its proprietary media products and "the value they provide".

"Clients always exercise an informed opt-in to participate. As we’ve already indicated, we insist that the ANA share any specifics relating to our group with us so that we can ensure continuing contract compliance. If clients have any questions they should contact us."

In a statement, Interpublic Group (IPG) says it proactively tackled non-transparent practices in 2005 and was "the lone major holdings company to speak with investigators".

The statement continues: "We eliminated these practices from our organisation, issued public disclosures, and strengthened our governance controls. Since that time, we have continued to modernise our transparency practices for an increasingly digital and complex media landscape.

"Here at IPG, we do not accept rebates in the US, nor do we believe rebates should be part of US market practices. Additionally, IPG does not buy 'inventory media,' where we pre-purchase media on our own account and re-sell it to clients – this decision has been a point of differentiation for our company."

IPG adds: "The broad and anonymous nature of the report's allegations is unfortunate and inflammatory. The picture the report describes is not consistent with our actual business practices."

Publicis Groupe, meanwhile, went on the offensive, criticising what it perceives was a lack of dialogue with the media agency industry.

"Had the ANA been willing to have an open dialogue with our industry, we would have been immediately ready to co-operate, as we did last year, and that is reflected in our engagement with the 4A's. By refusing such a dialogue and choosing a sensational approach, it seems clear that the ANA is not trying to find a solution to the alleged problems, and instead is acting with other goals in mind.

"The ANA has failed its members, advertisers, agencies and the entire industry by releasing a report that relies on allegations about situations involving unnamed companies and individuals to make broad, unsubstantiated and unverifiable assertions."

Marketers expressed concerns about the findings of the report. In a statement published on Business Insider, a Procter & Gamble spokesperson says:

"At P&G, we want and expect strong agency partnerships based on mutual trust, transparency and teamwork. We have a 'trust but verify' approach that includes having clear and thorough stipulations in our contracts, regular audits on performance, and third party verification that ensures transparency. If we find irregularities we will take remedial action."

Unilever SVP of global media Luis Di-Como told Business Insider: "Trust and transparency are critical to any relationship, so we take the ANA’s findings very seriously."

Di-Como adds: "At Unilever, we are actively engaged with our agencies and the industry at large to exert greater control and responsibility around media transparency."

Meanwhile the World Federation of Advertisers has called for a global industry-wide solution.

"Advertisers should take the lead in addressing the challenge, but WFA also believes in, and calls for, global cross-industry collaboration to find answers. That’s why we have been conducting systematic dialogues between media agencies and clients around the world to better understand the issues and ultimately try and engender greater trust in the marketplace."

AdNews will be following up the report with more reaction from overseas and closer to home.

If you have any thoughts on the report or transparency within agencies, please email: arvindhickman@yaffa.com.au

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