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For an industry that hinges on sensing the zeitgeist, the world’s biggest ad agencies aren’t handling a slow-burning controversy over their U.S. billing practices with much finesse. Ad firms such as WPP and Omnicom need to win back the trust of big brands like Coca-Cola, Ford and Unilever quickly or risk eroding their most profitable business, namely placing ads for clients on TV, radio or online.
The Association of National Advertisers officially released its report that says that ad agencies get rebates from media companies that their clients are unaware of. The big companies that own the major media buying agencies questioned the report because it doesn’t name the agencies that receive rebates.
Read More Broadcasting Cable: Association of National Advertisers Report Says Agencies Get Rebates
Shady practices such as taking cash rebates as kickbacks from media owners and marking up the cost of ad space are pervasive in the $200bn (£137bn) US media buying market, according to a new report that is set to send shockwaves through the global advertising market.
Read More The Guardian: Report Sheds Light on Shady Practices in US Media Buying Market
The Association of National Advertisers this morning released findings of an extensive probe into the “transparency,” or lack thereof, of agency media-buying practices and said it found the practice of kickbacks or non-transparent media rebates to agencies to be “pervasive.”
Read More MediaPost: ANA Finds Agency Media Kickbacks ‘Pervasive,’ High-Level Execs Signed Off
Advertising agencies in the US have been systematically padding their profits by using non-transparent practices such as taking rebates from media companies and not disclosing them to clients, according to the Association of National Advertisers (ANA), which released the highly anticipated findings of an eight-month investigation into the sector on Tuesday.
An influential Madison Avenue trade organization unveiled an investigation that alleges kickbacks, unauthorized rebates and the undisclosed resale of ad inventory at higher prices could be “pervasive” in the arcane but important world of media buying.
The ad business is generally accepted as being in a hole. A large part of the industry is not trusted by those who pay for it and whose interests it exists to serve. Digital advertising is generally so poor that consumers go out of their way to avoid it. So-called precision targeting starts to get close to an invasion of privacy. Fingers are being pointed, mud is being slung. How on earth did we get into this mess?
Read More MediaVillage: The State of the Ad Biz – A Mess of Our Own Making
Maurice Levy, chief executive officer of Publicis Groupe SA, called the Association of National Advertisers’ pending study on transparency in the ad business “unfair and an unwarranted attack on the entire industry.”
Read More Wall Street Journal: Publicis CEO Calls ANA’s Pending Report ‘Unfair’
An eight-month probe by a marketing trade group revealed that ad agencies in the U.S. are accepting rebates from media companies, said people familiar with the matter, findings likely to stoke concerns about transparency in the industry.
Read More Wall Street Journal: Probe Said to Find Rebates Lurking Behind U.S. Ad Deals
Several people who rightly chose to remain anonymous talked to The Wall Street Journal about the Association of National Advertisers’ eight-month probe of the relationships between ad agencies and their media partners. The piece just went live, and it is a mess.