MFA and AANA join forces for media practices action plan

James McGrath
By James McGrath | 22 June 2015

Key advertising peak bodies have launched a joint effort to develop an “action plan to achieve greater transparency” within the media landscape.

Following on from news the US ANA has launched its own process, looking for a third party to handle the investigation, the Australian Association of National Advertisers (AANA) and the Media Federation of Australia (MFA) have confirmed to AdNews that the MFA had tapped PwC to conduct a similar process.

However, AdNews understands that the AANA had no part in tapping the PwC, saying that while it will contribute to the action plan, that its input will be seperate from the recommendations of the PwC report.

The recommendations from the PwC report will inform the action plan, rather than PwC writing the plan itself.

“The MFA has been exploring how it can provide some practical solutions for both advertisers and media agencies on how to obtain greater trust in the advertiser / agency relationship,” MFA CEO Sophie Madden told AdNews.

“This has included a robust process conducted by PwC on behalf of the MFA, to better understand the issues related to media transparency, the main areas of concern and how these are impacting our industry.”

It is believed that PwC has been investigating since about March, with the focus of the investigation to set out what the issues are and how they impact upon the industry's reputation, rather than a forensic look at alleged shady practices.

The process has been ongoing since the start of the year and was the result of a “mish-mash” of different issues floating around the media space rather than being triggered by any one incident.

The MFA said that it hopes the action plan will be shared within the next few months.

It is thought that the outcomes of the PWC investigation will be mulled over the next few months, with a set of practical solutions for all parties, or an “action plan to achieve greater transparency”.

“Ensuring there is transparency and trust in the media buying process is a key priority for AANA members.  We are currently working via the AANA & MFA Media Forum to agree an action plan to achieve greater transparency," a AANA spokesperson told AdNews.

“We intend to pursue this process and evaluate the outcomes in the coming months.

“Clearly, transparency in media buying is a global issue and, through our membership of the World Federation of Advertisers, we keep abreast of developments in other markets so that we can secure best practice outcomes.”

However, it is thought that initial discussions on the investigation have outlined a scope that is wide in nature, from advertisers, to media agencies, to media owners.

Trinity P3 managing director Darren Woolley told AdNews this morning that the investigation is a positive, but questioned what impact it would have.

“It's a positive that the AANA and the MFA have teamed up for this, but if at the end of the day the result is an action plan, then I'm not sure that's going to change any of the fundamental issues.

“The onus for change is on the advertisers. They're the ones who have the money – the golden rule says that the one with the gold has the power.

“If it's just a code of conduct, then it's largely going to be ignored.”

He added that advertisers could take more interest in the contract for services drawn up with agencies, but also added that the margins agencies were making were razor-thin, adding incentives for agencies to find revenue by other means.

Responding to questions this morning, Madden said the MFA is not an industry regulator, saying that if an advertiser is not happy with their current agency arrangement, the most effective change would be to review the terms of their agency contract or change agencies.

Woolley said that one welcome outcome would be similar to that put forward by the IPA and ISBA in the UK, which included draft contracts which clients could follow.

While the media transparency debate has been conducted in the background for years, it was brought into stark focus by comments made by ex-MediaCom CEO Jon Mandel, suggesting that kickbacks were rife in the industry.

The issues have been bubbling away in Australia too, and while not related to kickbacks, an Ernst & Young investigation of GroupM after revelations that it had misreported TV campaigns to clients found that the holding group had been operating a value bank and not passing the cost savings onto clients.

“Value bank on selling – it was a situation that was against the ethics and regulations within GroupM Australia – no on charging of value banks is allowable. It’s not illegal but it’s against the ethics of our company and not acceptable,” then GroupM chairman John Steedman told AdNews in March.

The clients were refunded the money they were charged in November 2014 but Steedman would not be drawn on the value of those refunds.

"Clients received the airtime they wanted – but it was in breach of GroupM’s policy to charge for it. From now on, new procedures and controls are being put in place to make sure it doesn’t happen again," he said.

Meanwhile the ACCC still refuses to confirm or deny that it is looking into the industry under anti-competitive legislation.

“Depending upon the circumstance, the size of the rebates and the manner in which they are secured may raise concerns under the unconscionable conduct provisions of the Competition and Consumer Act 2010,” it said.

“Where a business takes advantage of its superior bargaining position to use undue influence and unfair tactics to engage in transactions or dealings which are deliberate, involve serious misconduct or involve conduct which is clearly unfair and unreasonable, this may be considered unconscionable conduct.”

* An earlier version of this story stated that the AANA and MFA working group had engaged PwC, however AdNews now understands the MFA engaged PwC seperately to the working group.

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