When I cracked open the Association of National Advertisers’ (ANA) 58–page report on media transparency at 10pm on the night it was published and tuned into the webcast where the ANA discussed the report findings, there were no gasps of surprise at what it contained.
Although anonymised, it showed what everyone already knows: rebates, staggering mark–ups, inflated ‘research’ costs, conflicting agendas between clients and networks, and value banks that are very real and “pervasive”.
No real gasps of amazement either that the six major holding groups are universally outraged at the report and have moved to discredit it and play down what it’s found.
The biggest standout for me is the discussion around the “disconnect” between what clients and agencies think their relationship is, and should be.
But what exemplifies this more that the fact that the ANA – which represents clients – and the American Association of Advertising Agencies (4As) – which represents agencies – are at each other’s throats over it. The 4As has damned the report, which doesn’t offer much hope for addressing the disconnect and working together to find a better way.
That top media execs have admitted it’s not always an agency’s duty to act in the best interest of its clients is damning. In a service industry, if the client isn’t the first priority then you’re doing it wrong. Global networks obviously have an agenda to make more profit, but it should by all accounts follow that doing the best thing for the client, is in turn is the best thing for agencies.
The report, while shining a light on agency behaviours, doesn’t let clients off the hook. The three factors at play the ANA called out on its webcast all pointed to clients: the influence of client–side procurement driving down margins; marketers lacking expertise to understand what’s in a media plan; and not enough understanding about what their contracts even mean.
While the report solely investigated the US market, and there are differences between what is, and is not, allowed in this market, the ANA document is causing waves here. That’s because whether anyone wants to say so or not, those things, and others, happen here too.
Australia had in its own backyard something that showed media agencies weren’t always as transparent they claimed to be. MediaCom’s misreporting scandal, and its admission to selling on value bank inventory, showed that these tactics are alive and well. I would hazard that MediaCom wasn’t the only one, and to its credit GroupM has done its best to move on from the crisis that enveloped it last year with processes and compliance initiatives and now claims to be the most compliant group in the country. Mediacom’s client list might be looking that little bit thinner, but GroupM was forced to clean up its
processes. The same can’t necessarily be said elsewhere.
Despite what everyone is saying (or not saying), we know that agencies operate value banks, whether they are called that or not. A value bank by any other name, is still a value bank and if that inventory isn’t being used in the way it’s intended then agencies are making a misstep.
So the question is, what now? As Bob Liodice, president and CEO of the ANA, said the report is “troubling” for many, but it shouldn’t be seen as a stick to beat the industry with, “it presents an opportunity to rebuild agency trust … [and identify] the best processes and approaches to build better ways of doing business.” Amen to that.