Dear Sir Martin Sorrell - The Transparency Needed in Advertising Isn't In Financial Reporting, It's In Agency Bills

Did anyone else have a "marmalade dropping" moment this morning when they saw the headline about Sorrell claiming the ad industry isn't transparent enough in its reporting? After Jeremy Clarkson handing himself in for assaulting a colleague -- which led to his Top Gear presenting contract not being renewed -- this looked to be the second-biggest media confession of the year so far.

Like many, I'm sure, my eyes soon poured over the detail. I was expecting some form of public falling on a sword with a note apologising for all those opaque bills that WPP, at the top of the holding company food chain, hands over to the great and good of the advertising industry. Maybe there was going to be a promise of reform?

Not on your nelly. Sorrell's point was just another dig at Omnicom, number two in Campaign's Holding Company league table printed today. The main point Sorrell was trying to make was that part of the way in which it reports its figures is unclear -- although he was not very clear on the how and why. The inference seemed to be that Omnicom could be clearer on the split between traditional and digital revenues. Interestingly, reports suggest that the criticism arose from the WPP Chief Executive dodging a question as to what would be the next big thing -- the biggest disruptive influence on business. Instead of answering the question, he chose to have a dig at Omnicom.

In so doing, I actually think he gave the clearest answer possible on what the biggest disruptive influence is going to be for the ad industry. Put simply, the major issue is holding companies that believe the big transparency issue of the day is how they report their figures in financial results rather than the area they truly need to be transparent in -- client bills. In WPP's case that a massive GBP3 billion worth of bills. Mind you, to be fair, the transparency I'm talking about would not apply to the entire sum -- just the digital part.

You see, the reason brands are beginning to build their own Data Management Platforms and taking baby steps in running their own advertising campaigns is not just so they can take more control over campaigns and keep hold of their own data. There's a huge pinch of agency distrust in their decisions because they're never sure what they're paying to whom. I've already mentioned the fear this week, which seems to be backed up by ISBA -- that as much as half of a client's digital media spend can be lost to fees and click fraud. 

So if you were head of the largest holding company in an industry where the huge clients now have the ability to at least consider going their own way, which transparency do you think would be the big issue of the day you couldn't avoid -- financial reporting or transparent billing?

The fact that Sir Martin Sorrell chose to focus on the former speaks volumes.

1 comment about "Dear Sir Martin Sorrell - The Transparency Needed in Advertising Isn't In Financial Reporting, It's In Agency Bills".
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  1. David Adelman from OCD Media, March 26, 2015 at 10:58 a.m.

    The amount of internal money laundering occurring at these mega holding companies has to end. I've written two blog posts about this very subject.

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