Advertising holding companies welcome ACCC inquiry into digital

By Mariam Cheik-Hussein | 12 August 2019

Major holding companies have welcomed the Australian Competition and Consumer Commission’s (ACCC) recommendation to look into the "opaque" buying and selling of online advertising.

Last month, the ACCC recommended an inquiry into adtech services as part of its Digital Platforms Inquiry.

The watchdog flagged agencies may be incentivised “to act in ways that benefit their own interests and are to the detriment of advertisers”.

“There is a lack of transparency in the pricing of services used to facilitate automated or programmatic online display advertising, known commonly as adtech services," the ACCC said in the report.

"This means that both advertisers and websites lack visibility over pricing. They do not know what proportion of advertiser spend goes to adtech services versus how much goes to the purchasing of advertising inventory.”

In response to a request for comment from the holding companies, Omnicom Media Group (OMG) says that while it has “little detail”, it supports any initiative by the ACCC to improve best practice across the industry.

“OMG has been vocal and on the record in addressing the industry trust issues that have emerged in recent years and has provided a clear framework for digital supply chain transparency across its client base,” says CEO Peter Horgan.

IPG Mediabrands also expressed its support to “elevate clarity and confidence” in the media industry as it evolves.

“IPG Mediabrands and our individual businesses have continued to modernise transparency practices for an increasingly digital and complex media landscape, including our decision not to take media inventory positions,” an IPG spokesperson says.

“As a result, we have a high degree of clarity in our contracts with clients and media owners regarding our respective roles and interests.”

Mark Lollback, GroupM AUNZ CEO, says the inquiry could resolve any “misunderstandings” as to how media agencies operate. 

“We don’t seek any form of hidden revenue from media partners or vendors, and we employ industry-leading communications practices and compliance controls,” Lollback says. 

“We were the first group to set up a team specifically focused on trading compliance. Our clients are clear on how we operate and are welcome to ask us questions or audit us anytime.” 

The adtech agencies contacted declined to comment.

The government has said it will take 12 weeks to review the ACCC recommendations before it makes its final decision.

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