‘Brands should make media oversight a board-level priority’

The US Association of National Advertisers (ANA) has criticised the “level of irresponsible behaviour of both agencies and advertisers”, urging its members to take control of media transparency by rewriting contracts, hiring a ‘chief media officer’ and undertaking thorough audits.

The recommendations come after an investigation by the ad body found that senior executives at agencies were aware and regularly mandated controversial practices often not disclosed to clients. These included cash rebates, rebates as inventory credits and ‘service agreements’ for non-media services such as consulting or research.

While rebates are common in many markets, including the UK, in the US they are not allowed. Most media buying is handled by six main holding companies – WPP, Havas, Omnicom, IPG, Publicis and Dentsu-Aegis – all of which have denied any wrongdoing.

“Advertisers are now experiencing a unique environment where demands for financial accountability and ROI are increasingly high, while transparency into media spending is difficult to achieve,” says Michael Karg, group CEO of Ebiquity.

“We’re at a turning point in the US advertising industry. With these recommendations, advertisers have the opportunity to pave the way towards greater transparency while laying a strong foundation to manage future complexity.”

Easing client/agency tensions

The new guidelines, from Ebiquity/FirmDecisions on behalf of the ANA, are designed to help marketers looking to ease the tension with their agencies. They suggest marketers should require media agencies to be fully transparent to elevate trust and restore confidence in the client/agency partnership.

They also recommend clients require their agencies to disclose all potential conflicts of interest and allow thorough audits of the agency, its parent company, affiliates and subsidiaries to ensure full transparency and contract compliance.

The framework consists of three key pillars:

1. Advertisers should establish overarching media agency management principles that can be easily understood and executed.
2. Advertisers should establish primacy over the client/agency relationship. Advertisers should regularly re-evaluate and upgrade internal processes and practices.
3. Advertisers and agencies should have a uniform code of conduct to guide the relationship and engender trust.

The ANA has drawn up a new contract that it believes all advertisers should be using. It is based on a similar contract from the UK’s ISBA, which includes details around viewability, brand safety and click fraud that it says was previously missing and allowed agencies to profit in these areas.

Debbie Morrison, director of consultancy and best practice at ISBA, says: “These contracts will give UK and US marketers greater confidence in holding agencies to account. They should fuel conversations on key issues surrounding media transparency including ad fraud, ad blocking, viewability.”

Read more: Why agencies’ reluctance to talk about rebates is making marketers nervous

The ANA has also recommended brands create a new “chief media officer” role. It says this person should serve as a centralised internal resource to oversee media strategy, partner with external agencies, and work with third-party suppliers to optimise the media mix and share best practices across teams.

Bill Bruno, North America CEO at Ebiquity, told Marketing Week: “We believe this is an issue that requires board oversight within the individual advertisers. Collectively, the US advertising industry contributes about 20% to the US GDP. Advertisers now have an opportunity to define how future business is conducted.”

The ‘opportunity’ for marketers

The guidelines have been broadly welcomed by marketers, with Tom Denford, co-founder of media consultancy ID Comms, calling it an opportunity.

“If advertisers adopt these guidelines they will certainly be in a better position than they were 12 months ago. The guidelines should be considered an opportunity for advertisers and agencies to reset their relationships, especially where these have been clouded by concerns over trust and transparency,” he says.

“Media is a powerful lever for growth for brands and they need reliable, trusted working relationships with their media agency partners. It is now down to each individual advertiser to define their own course of action to modernise their agency relationships and improve their own media governance capabilities and skills.

“The ANA’s good work in this area will help us all start to redefine media as a race to the top for brands, not a race to the bottom for low cost and low quality.”

Additional reporting by Sarah Vizard