ANA Calls Agency Financial Relations 'Disturbing,' Releases Findings To Back It Up

At a time when tensions are rising between advertisers and their agencies over unclear or undisclosed forms of media compensation, the Association of National Advertisers is releasing findings of a new study intended to shed light and fix some of the issues that are contributing to it. Details of the study will be presented during the ANA’s Advertising Financial Management conference in Phoenix next week, but the association released highlights and an executive summarythis morning.

The study, “Enhancing Client/Agency Relations 2015,” reveals that there is “significant dissatisfaction about the quality of the briefing process and compensation agreements” between advertisers and their agencies and recommends some simple steps for improving it.



Most significantly, the study reveals a pronounced disconnect between the views of advertisers and agencies about the process. While a majority (58%) of advertisers surveyed during the first quarter of 2015 said they provide “clear assignment briefs” to their agencies, less than half that number (27%) of agency executives who responded felt that way.

Asked whether the current client approval process works well, a majority (54%) of advertisers concurred, while 36% of agency execs agreed with that statement.

Not surprisingly, agency compensation was one of the most contentious issues revealed in the study: Only 40% of agency executives agreed it was fair, versus 72% of advertisers.

The findings come at a recent low period in agency/client relations, particularly on the subject of media compensation, because it follows an inflammatory disclosure during the ANA’s recent media conference by former Madison Avenue media exec turned whistleblower Jon Mandel, who alleged that undisclosed agency rebates and “kickbacks” from the media are far more pervasive and systemic than most clients are aware of. That disclosure is said to have caused some new tensions between the ANA and its agency counterpart association, the 4As, but the two organizations are believed to have begun working more closely to tackle the issue since then.

Other highlights from the new study include:

  • Clients and agencies are lukewarm on the value that procurement adds to client/agency relationships. Less than half of clients (47 percent) felt that procurement adds value, while only 10 percent of agencies agree.

  • Clients (54 percent) and agencies (47 percent) agree that in-house client resources are increasingly becoming a realistic option for clients.

  • Clients and agencies reported that agencies work well with other agencies, and 65% of clients concur versus a very robust 88% of agencies.

  • Agency talent remains an issue. Only 56% of clients believed that agencies have the right talent to meet client needs over the next two years. Agencies are slightly more bullish at 64%.

  • Despite their concerns the majority of both clients (87 percent), and agencies (86 percent) felt that the agency is a valued business partner that plays an important role in the client’s business strategy, and driving business results.

“There are disturbing legacy issues that continue to plague the partnership that have been further complicated by blossoming transparency concerns,” ANA President-CEO Bob Liodice said in a statement provided with the release of today’s executive summary, adding that the association is committed to “making tangible improvements and will be working in partnership with the 4As to actively address these issues.”

2 comments about "ANA Calls Agency Financial Relations 'Disturbing,' Releases Findings To Back It Up".
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  1. Bill Duggan from ANA, April 23, 2015 at 12:16 p.m.

    While ANA appreciates coverage of these survey results, the headline, “ANA Calls Agency Financial Relations Disturbing” is misleading. The title of this report, in fact, is “Enhancing Client/Agency Relations.” It has little to do with “financial” relations, except several questions on agency compensation. Rather, it covers issues such as the overall strength of the client/agency relationship, the agency’s role as a business partner, and process management (i.e., client approvals, briefing). The word “disturbing” was picked up from the quote in the press release from Bob Liodice, President and CEO of the ANA that said,“We are pleased to see that at the core, client/agency relationships are sound. Having that strong foundation is a cause for optimism. However, there are disturbing legacy issues that continue to plague the partnership that have been further complicated by blossoming transparency concerns. The ANA is committed to making tangible improvements and will be working in partnership with the 4As to actively address these issues.”

    A noteworthy highlight is that both clients and agencies agree that their client/agency relationships are strong — 87 percent of clients and 86 percent of agencies agree. The big news in this survey is the opportunity to improve the agency briefing process – one of those legacy issues that Bob’s quote refers to. Clients and agencies are not in agreement on whether clients provide clear assignment briefings to agencies. Only 27 percent of agencies believe clients do a good job (and zero percent strongly agree). However, 58 percent of clients think they perform well on briefs. It’s amazing how something so fundamental is still such an issue! ANA’s perspective here is that clients must take note of this and commit to change. Bad briefs are frustrating to agencies and cost clients both time and money — for agency rework and the resulting agency fees — not to mention the opportunity costs of subpar creative in the marketplace. As one survey respondent said, “It is as much the client as the agency who can make the business successful.”

    Bill Duggan, Group EVP, ANA

  2. David Adelman from OCD Media, April 23, 2015 at 6:11 p.m.

    I do hope this report also chastises marketers who demand that their agency wait 120 days or more to get paid. We cannot have a frank discussion about financial relations without addressing this distrubing trend.

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