Media Agencies Slam Transparency Report Claiming Widespread Rebates

Media Agencies Slam Transparency Report Claiming Widespread Rebates
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A report coming from the States claiming media rebates and non-transparent practices are widespread among the US media buying landscape has ruffled a large amount of feathers among media agencies.

A number of media agencies have come out swinging at the report, claiming it’s “insubstantive” and was based on “subjective methodologies”.

A number of big brands have also released their own statements, citing concern of the findings, as have industry bodies.

The study released by the National Association of Advertisers (ANA), the US industry body, claims there’s a number of non-transparent practices going down in Adland in the form of media rebates.

The study cited a number of instances of non-transparent practices and pressure on senior agency execs from higher up.

Below are the statements we have so far, some sourced from AdAge and Business InsiderB&T has contacted a number of media agencies in the Australian landscape for their take on the report. We’ll update this story as we hear back.

Dentsu Aegis Network

From Jerry Buhlmann, global CEO

Today’s ANA Report (June 7th) is an insubstantive report with subjective methodologies and anonymous input. The business practices referenced in this report do not exist within our US business. Our media buying process is robust and transparent for our clients, is subject to rigorous compliance processes and all our clients have the ability to audit us. Furthermore, we pride ourselves on our focused and extensive efforts on compliance policies, practices and controls.

GroupM

From David Grabert, director of global communications

The ANA report and the objectivity of its authors and advisors needs to be examined carefully. The report should not be allowed to tarnish the entire industry, nor every company in it.  As we stated from the outset of the ANA’s exploration, GroupM does not seek, nor accept rebates or hidden revenues in any form from media partners in the U.S.; nor do we accept service fees from vendors that are not disclosed to clients.  GroupM is straightforward with clients concerning our proprietary media products and the value they provide; clients always exercise an informed opt-in to participate. As we’ve already indicated, we insist that the ANA share any specifics relating to our group with us so that we can ensure continuing contract compliance.  If clients have any questions, they should contact us.

Omnicom

We have not yet had a chance to fully review the ANA study, however based on the overview provided in the press release we believe that the key findings — neither quantified nor qualified, and based on a small sampling of unnamed sources — do not accurately portray how Omnicom’s agencies work on behalf of our clients; in so doing, it does not serve the best interests of the clients that the ANA purports to represent.

As we have said since the ANA first launched its study last year, we believe that trust and disclosure are the cornerstone of every client relationship. This means that all of our U.S. media agency clients receive all value negotiated on their behalf in the form it is received. Compliance with each individual client contract has always been central to that trust at Omnicom – as is transparency in the structure and execution of each contract.

Publicis

Had the ANA been willing to have an open dialogue with our industry, we would have been immediately ready to cooperate, as we did last year, and that is reflected in our engagement with the 4A’s. By refusing such a dialogue and choosing a sensational approach, it seems clear that the ANA is not trying to find a solution to the alleged problems, and instead is acting with other goals in mind.

The ANA has failed its members, advertisers, agencies and the entire industry by releasing a report that relies on allegations about situations involving unnamed companies and individuals to make broad, unsubstantiated and unverifiable assertions.

Australian Association of National Advertisers (AANA)

From Sunita Gloster, CEO

Any best practice guidelines or initiatives that emerge are likely to have universal application, so we will aim to share them with our members here. Every advertiser’s contractual relationship with its media partner is unique and commercially and competitively sensitive. Individual advertisers therefore have the primary responsibility to ask the right questions of their agency partners so that they can be reassured that there is transparency. The role the AANA can play is to help equip members with the basic framework that is a prerequisite to obtaining transparency.

Whilst the US report reminds advertisers to remain vigilant, it is important that we remember these principles of transparency, disclosure and fairness are central to the reputations of all parties involved. Equally importantly, adherence to these principles is crucial to achieving our common goal which is to show the link between advertising and business growth. Businesses need to have confidence in the integrity of their media spend allocations.

From Matt Tapper, chair

Advertisers are ultimately responsible for ensuring they are appropriately equipped to put in place agreements and processes that deliver fair value to all parties involved. The need for transparency in media buying is not a new issue. It is a perennial challenge, one that will only get more complex. New media platforms and technology developments mean new trading arrangements are springing up all the time. This US report is a timely reminder that advertisers cannot be complacent about these conversations.

World Federation of Advertisers

From CEO Stephan Loerke

Transparency has long been considered a critical issue by WFA and remains a priority for its members. We welcome the findings from the ANA and will continue to address the challenge globally, not least in emerging markets where transparency problems can be more acute.

Advertisers should take the lead in addressing the challenge but WFA also believes in, and calls for, global cross-industry collaboration to find answers. That’s why we have been conducting systematic dialogues between media agencies and clients around the world to better understand the issues and ultimately try and engender greater trust in the marketplace.

Unilever

From Luis Di-como, senior vice president of global media

Trust and transparency are critical to any relationship, so we take the ANA’s findings very seriously. We support its work to ensure that as the media industry evolves these values remain a top priority.

At Unilever, we are actively engaged with our agencies and the industry at large to exert greater control and responsibility around media transparency. We go to great lengths to make certain that our proprietary procedures and policies maximise our investments and fulfil our contracts, in both the letter and spirit. We’re confident the right steps will be taken to strengthen our industry.

Proctor & Gamble

We appreciate the ANA’s diligence to study media transparency practices, particularly as technology is bringing a significant transformation in the industry. As a result of the study, it’s important that advertisers and agencies work together appropriately to deal with the changing media ecosystem.

At P&G, we want and expect strong agency partnerships based on mutual trust, transparency and teamwork. We have a “trust but verify” approach that includes having clear and thorough stipulations in our contracts, regular audits on performance, and third party verification that ensures transparency. If we find irregularities, we will take remedial action.

 

 

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