The American Association of Advertising Agencies Thursday issued a list of “transparency” principles to guide agreements among agencies, advertisers and media vendors. The list is the product of a special task force that was formed last year after a presentation made at an Association of National Advertisers conference by former MediaCom CEO Jon Mandel that suggested agencies were routinely pocketing rebates paid by media vendors and not disclosing the payments to clients.
At the time, the effort was dubbed a joint task force of the 4As and the ANA. However the guidelines now being issued are not endorsed by the ANA.
According to the 4A’s the groups couldn’t agree on a key issue: whether the language in the so-called transparency “principles” should be presented as suggested guidelines or contract-specific language.
Here’s how the 4A’s described the dispute:
“Despite the fact that a joint task force between leading advertisers and agency leaders set out to address the issues of transparency together, the 4A’s is issuing these principles to its members without further delay. While that collaboration between marketing and agency leaders led to the development of these principles, ultimately the groups could not come to terms on language. The advertiser group sought to go beyond developing guideline language into prescribing contract language; the 4A’s believes that should be left for discussion between individual agencies and clients and does not believe that is the role of an industry trade association.”
But ANA CEO Bob Liodice said that was a misrepresentation of why the advertiser group decided not to endorse the principles. “They’re incomplete,” Liodice said. For one thing, they don’t address reporting and analytics, and they also don’t go deep enough into advertiser rights to audit media agency performance.
The joint task force was designed to come up with a set of transparency principles to guide the entire industry, Liodice said. But without having the results of the K2/Ebiquity study, he added, “it’s putting the cart before the horse….If they want to go rogue that’s fine, but who are these principles for?”
Liodice said he and ANA members cited in the 4As release on the principles were angry that the 4As mentioned their input without their consent because it sounds like they are endorsing the principles, which they are not. “It’s a false implication,” he said. “We’re unhappy and so are the companies mentioned.” “Why release principles without understanding the facts,” he added.
Responding, 4As President Nancy Hill said that “our feeling was that there was a lot of really hard work” put into the effort by both agency and advertiser representatives on the task force over much of the past year. “It’s good work and it’s historic” she added and to not go forward would in effect mean discarding it.
Others noted that the ANA, after months of being on board, suddenly pulled back in December and that it wasn’t until last week that the group pulled out the let’s-wait-until-the-K2-Ebiquity-study-is-done card. That study was commissioned back in October of last year.
Hill noted that the 4As membership has been eagerly waiting for the organization to issue the guidelines. “It’s a good starting point,” said Hill, noting that “there’s no reason it can’t be evolved” to address findings from the ANA-commissioned study.
As to the advertisers cited in the release, Hill stressed, “we didn’t say they endorsed it, we said we got input. It’s no secret who was involved. “ The 4As said that the principles were created with input from advertisers including L’Oréal, Bank of America, MasterCard, ConAgra, Boehringer Ingelheim, Target and Nestlé.
The principles address transparency in working relationships among clients, agencies and the media in three specific areas:
Client/agency relationships for U.S. media planning and buying services
Separate commercial relationships between agencies and media vendors and other suppliers
The points cover business arrangements, agency remuneration practices and recommended guidelines for media market participants in the U.S.
More detail on the 4A’s transparency guidelines can be found here.