The recently released Association of National Advertisers (ANA) report on media transparency created quite a stir in the advertising industry across the globe for several of its revelations including cash rebates by media agencies. The debate will continue to garner attention as ANA has now invited the 4As (Association of Accredited Advertising Agents) board of directors to its upcoming Masters of Marketing conference in Orlando on October 19 2016, to “have an open dialogue” on the subject. Given the 4As rejection of the report, developments in the space continue to be closely watched by all.
For those who missed out on the ANA report, it revealed some explosive allegations on how the advertising industry followed unethical, non-transparent business practices, including cash rebates to media agencies in the US media ad buying ecosystem. It alleged that there was evidence of non-transparent practices across a wide range of media including digital, print, out-of-home and television.
As soon as the report was out, the advertising industry dominated by the six holding companies refuted the allegations. Omnicom, IPG, Publicis and WPP issued statements clarifying that these practices were not followed in their agencies, calling the broad and anonymous nature of the report’s allegations ‘unfortunate and inflammatory’.
The ANA represents the biggest global brands including Procter & Gamble, L’Oreal, Coca-Cola, Toyota and Apple, and hence these allegations cannot be ignored. Marketers entrust media agencies to secure them the best and most efficiently priced advertising slots but these claims raise the question if media buying agencies are securing the most strategic slots for advertisers, or whether they’ve made a previous agreement with a media owner to spend a set amount of the marketer’s dollars in order to receive a rebate.
The report points out at concerns at multiple levels. And with the problem being deep-rooted in the system, having a single step solution is improbable. ANA has also released a set of recommendations that can be followed to ensure greater transparency. Some of these include re-evaluation of contracts and creating new positions within the agency to enforce transparency. Some agencies have also realized this issue and have come up with solutions such as Transparent Media Partners online survey, giving marketers more control and understanding of the advertising procedure.
Given the survey was localized geographically in the US, how it translates to MENA region is difficult to extrapolate and yet is critical to marketers because transparency is one issue that is across geographies. Political instability, lack of data and dwindling economics would suggest that the situation is far worst then what the report has suggested. Needless to say, some marketers in MENA, especially the ones with global roots, are likely to take serious note of the recommendations provided by ANA.
However like any controversy, the jury is out on this one as well. Sir Martin Sorrell, WPP CEO, openly criticized the report. Despite what ANA’s report highlights, and an obvious concern around transparency, it is still a wait-and-watch on how the industry comes together to tackle the issue at hand.
