MFA and AANA to tackle “perceived lack of transparency by media agencies”

Pippa Chambers
By Pippa Chambers | 27 November 2015

Following a tough two years for the media industry in which dubious business practices have littered the landscape, adding volatility and a stain of shadiness to a once untouchable and prosperous space – a fresh new framework has arrived to help sweep away cobwebs of past days.

While firm boundaries and a more official response from an industry body may have been desired hot the heels of GroupM's MediaCom reporting debacle late last year, these things take time to craft.

This leads us to the development of The Media Federation of Australia's Transparency Framework, in partnership with the Australian Association Of National Advertisers (AANA).

The new offering, listed on both websites this week, has been developed for agencies and advertisers.

In an email to members the MFA said: “One of the challenges our industry has faced this year, both globally and locally, is in the area of a perceived lack of transparency by media agencies in relation to value extraction and the resulting impact this has had on our industry’s reputation.

“The MFA Board, working with PwC, set out early in the year to better understand the issue and determine how the MFA can play a positive role on an area that sits squarely within the bounds of agency/client commercial in confidence dealings.”

It went on to say how industry stakeholders across media owners, advertisers, industry consultants and media agencies contributed to the findings. The key elements found included the continued pressure by advertisers to reduce agency margins/ fees; increased agency operational costs in a fragmenting and more complex media market, and the need to sustain agency revenue/profit margins.

It said the main areas of concern are in relation to media agency transparency rebates, agency, commissions, value banks, ethics training and agency trading desks.

It raised suggested solutions such as disclosure, increased system automation, increased levels of client auditing, third party trust opinion, and improved client knowledge, particularly in the area of agency contracts.

“At the onset, the MFA Board set out to determine a meaningful role for the MFA on this issue and to contribute in a constructive way on behalf of members,” the MFA said.

“A number of different avenues have been explored, including compulsory and opt-in compliance processes and member codes. However, following extensive consultation, we believe advertisers' own compliance processes and sound agency/advertiser contracts are of much greater importance.

“As a result, the MFA Transparency Framework has been developed in conjunction with the AANA, to set expectations for agencies and advertisers in the key areas of advertisers' concern.”

It said in the next few weeks, this framework, along with supporting educational materials ‘Key Questions to Ask’ pertaining to the areas of concern, developed by the AANA MFA Media Forum, will be shared with the AANA member base and made publicly available on their respective websites.

Further initiatives to improve knowledge and understanding in the areas were identified, including a potential Industry Ethics program are underway, for launch in 2016.

What do you make of the MFA Transparency Framework? A good tool to discuss the areas of concern with advertisers? See here for the full document.

Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au

Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.

comments powered by Disqus