Steve Parker Jr., co-founder and CEO of digital agency Levelwing, enlisted the aid of Frank Abagnale, best known as the former con man whose misadventures inspired the film Catch Me If You Can, to spread the word about the seriousness of ad fraud.
Abagnale, who went on to work for the FBI and start a financial fraud consultancy company, is among the guests with which Parker discusses the issue of ad fraud and transparency in a documentary called “Uncommon Transparency.”
“We as an industry have to speak up and have a real conversation and not avoid [the topic of transparency],” Parker told AgencySpy.
He said that while the topic of transparency did come up at Cannes, it was more focused around brand safety and ad placement issues.
“Those are issues, too…but there are only so many things that are controllable. What is fully controllable is how agencies bill their clients, how they make money off of them. The topic we choose to tackle is how agencies get paid and being transparent about it,” he explained.
Abagnale said that he viewed rebates and other nontransparent practices as fraud, explaining that, to him “every type of scam is basically the same. … They all have the same red flags.”
Parker explained that the problem is more prevalent than many are aware of, or willing to admit.
Media agencies have received the most attention when it comes to issue of transparency, including from law enforcement. Last year, the FBI launched a “long-term, industrywide investigation” regarding nontransparent media buying practices, which the Association of National Advertiser advised its members on in a letter and subsequent “Transparency at a Crossroads” report.
“It’s not just in media, it happens on the creative side, the analytics side, the ad serving side,” Parker argued “The media part has been talked about more [but] it’s pervasive throughout every aspect of this industry.”
“I think I’m being conservative when I say 95% of agencies are doing it [to some degree]” he added. “The only way to fix it is to have a real conversation.”
Those conversations are difficult, however, because agencies fear jeopardizing longstanding relationships by admitting to past or current transgressions. For clients, he said it’s a mix of a lack of understanding about the pervasiveness of the problem and a comfort in not questioning longtime partners.
“If I work with some guy and we have a great relationship, I don’t want to rock the boat even if I think they’re ripping off the shareholders of the company,” Abagnale said. “There’s a lot of laziness in the procurement process,” he also suggested, explaining that clients often aren’t likely to review all the details of a contract and its revisions that may include loopholes for non-transparent practices.
Parker explained it would take an intensive audit to discover many well-hidden non-transparent practices, something few clients are willing to ask for.
“When a brand asks an agency for an audit it sends ripples through most of these agencies,” he said. “It’s a very contentious thing to ask for. There shouldn’t be any tension all if you’re doing it right thing.”