'Agencies should benefit from investment, risk' - GroupM's Rob Norman

Arvind Hickman
By Arvind Hickman | 15 June 2016

GroupM's global chief digital officer Rob Norman says it is fair and reasonable for media agencies to benefit from the investment and risks they take in serving clients, provided it creates a competitive advantage for both parties and they are aware.

Norman was responding to the contentious ANA report that says the media buying ecosystem lacks transparency, media agencies were pocketing rebates without client knowledge and there is a disconnect between agencies and clients.

In a blog, he says the ANA report failed to mention the investments agencies have made in technology and talent to help clients get the most out of an increasingly complex media environment.

At GroupM, these include the creation of Xaxis and its buy side DMP Turbine, the acquisition of ActionX for cross-screen targeting, and WPP's acquisition of mobile adserving and attribution company Medialets, to name a few.

The ANA report takes aim at a conflict of interest around trading models that allow agencies to effectively act as agent and media owner when their holding holding groups run DSPs.

Norman says GroupM agencies the principal trading model, in which agencies offer guaranteed pricing without revealing costs to clients, "requires an opt-in, is subject to constant performance review and in no way depends on leveraging the spend of advertisers who do not opt in as we are leveraging technology and data not volume of advertiser spend". 

The other trading model GroupM agencies offer clients is a "high level of service pricing" that discloses as much costs at the vendor level as possible. Norman says in both approaches clients enjoy the same GroupM standards of viewability and verification. 

"These models are developed on the basis of marketplace insights into supply and demand dynamics and not the leverage of client volumes. The ANA Report does not concede that this is possible and inaccurately suggests such models must be at the compromise of value due to clients," Norman says.

"Media service companies accept many risks including intellectual property liability on behalf of clients. In turn it is our right to assume our own risks to the benefit of our own business especially when they only reward us if they reward the advertiser."

Read Norman's full blog here.

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