US trade body the Association of National Advertisers is launching a major investigation into transparency issues plaguing the industry, including allegations that undisclosed rebates are influencing media agencies' work for marketers.
The ANA have hired two research companies - Consultancy Ebiquity and its subsidiary Firm Decisions – to work with K2 Intelligence to conduct a “fact-finding” effort in order to demystify the media landscape, better understand the role of holding companies and find out if media plans are being compromised.
The consultants will also scrutinise non-transparent behaviour such as rebates, barter, arbitrage, dark pools, inventory management, global transactions, and supply chain media management.
New York-based K2 Intelligence is an investigative and integrity consulting firm, founded in 2009, that advises governments in complex investigations, business intelligence, anti-money laundering, regulatory compliance and cyber-security investigations and defence.
ANA president and CEO Bob Liodice said in a statement that each consultancy “brings a unique perspective and a set of powerful skills and resources. We believe those assets are highly complementary and will lead us to the objective — independent insights that our industry requires.”
“We'll get an unbiased articulation of the experiences of the industry. If the answer is there's nothing going on, great. If it's that there's lots of stuff going on, fine, we'll deal with what is found," Liodice told Ad Age.
Managing partner at Sydney media and marketing consultancy Navigare, Jeff Estok, said while it is not unrealistic a similar investigation could happen locally, it is likely Australian client and media bodies will take a “wait and see” approach, and once the US findings are revealed will decide on next steps.
“I doubt the local industry will conduct a simultaneous investigation,” he said. “The quantum of dollars being spent in the US is much grater than here, and although I don't think local agencies will be fearful of what's happening, they will be watching with great interest to see how it plays out.”
“Client suspicions in the US run very deep. It's in everyone's best interest uncover what’s going on and once it's uncovered for there to be a proper agreement on rules of engagement.”
Scepticism about media trading has been building over recent years, with online fraud, rebates and kickbacks now hot topics here and overseas. Last year, Australia's second biggest media agency, Mediacom, faced serious challenges after allegations it overcharged clients and reported inflated claims on the TV audiences its campaigns had delivered.
However managing director of TrinityP3, Darren Woolley, said conducting a local investigation into transparency would be “irrelevant”, largely because the issues are global.
“Whatever the issues are in the US would be just at relevant here. While they're addressing the universal concerns of advertisers everywhere, ultimately the responsibility lies with each individual advertiser and their agencies to ensure that they implement best practice,” Woolley said.
Woolley said the investigation will at least will set out guidelines, which the MFA and the AANA can then choose to implement.
“Well done to the ANA, it clearly is a universal concern around transparency and accountability and I think also comes down to each individual advertiser taking responsibly for the performance and the governance of their marketing and media investment.”
“At best this will act as a bellwether for what is happening in the industry and inform people on whether it is widespread or not,” he said.
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