ANA Aims to Increase Transparency With New Guidelines After Report on ‘Pervasive’ Kickbacks

Some agencies marked up media by 90%

Roughly one month after releasing a 58-page report detailing transparency issues in the advertising industry, the Association of National Advertisers today released a set of media transparency guidelines with support from marketing analytics company Ebiquity and FirmDecisions. 

"The purpose of these guidelines is to provide marketers with prescriptions for addressing transparency issues specific to the K2 Intelligence study. We outlined actions marketers should consider to diminish or eliminate non-transparent and non-disclosed agency activities and to ensure that their media management processes are optimized," Bob Liodice, ANA president and CEO said in a statement.

With the release of its new set of guidelines, the ANA has laid out a number of solutions advertisers can implement in order to achieve full transparency from their agencies:

  • Establish overarching media agency management principles that can be easily understood and executed. These include requiring media agencies to ensure complete transparency in all transactions with parent companies, subsidiaries, affiliates and third parties. Agencies should err on the side of communicating everything to marketers, the report said.
  • Establish primacy over the client/agency relationship, and regularly re-evaluate and upgrade internal processes and practices. The report said it is essential that advertisers have a thorough understanding of the existing client/agency relationship and know when the agency is acting as an agent on behalf of the client, or as a principal representing itself.
  • Create a uniform code of conduct between the advertisers and agencies. The code of conduct, between advertiser and its AOR, would be mutually agreed to, signed by both parties, and serve as an addendum to the master service agreement.

Part of the report also includes a Master Media Buying Services Agreement, created in partnership with General Counsel, Reed Smith LLP, which is essentially an outline of a services agreement that advertisers can use and give to their agencies.   

"We're at a turning point in the U.S. 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," Michael Karg, Group CEO, Ebiquity, said in a statement.

The ANA's study, done in partnership with K2 Intelligence, revealed evidence suggesting rebates and non-transparent activities among agency media buying practices were "pervasive" in the U.S. Essentially the report suggests that media agencies have purchased media on its own behalf, marked up the price by 30 percent to 90 percent and then resold it to its client. Even more damning, the report suggests that senior executives within the industry were both aware of and commissioned these activities. While the report did not identify anyone by name, it drew serious questions from holding companies, who argued that the report did not represent a full picture of the industry and only focused on a "small sampling of unnamed sources," per Omnicom Media Group.

Earlier this year the 4A's released its own media transparency guidelines, without support from the ANA after the two organizations had previously created a joint task force to tackle the issue of transparency in the advertising industry.