Nine months ago, I spent 45 minutes staring at the side of Irwin Gotlieb’s perfectly coiffeured head. Why would I do this?
Well, I was sat in the front row of the ANA’s Advertising Financial Management Conference in Phoenix, AZ. I watched as the GroupM supremo took the stage for his captivating fireside chat with ANA CEO Bob Liodice.
I heard with my own ears as Irwin raised the lack of trust and understanding between client and agency as a likely cause of the confusion surrounding media rebates and transparency.
When the ANA announced a joint media transparency task force with the 4As last year, many of us were hopeful of some positive collaboration, as suggested by Irwin, but were privately fearful that they would not be able to remain aligned on what was likely to be a rather bumpy road.
Fast-forward to today and we have two industry bodies at loggerheads over the failure to resolve that lack of trust and understanding. It’s symptomatic, I think, of the widening chasm of distrust that has built up between client and media agency over recent years.
The 4As and the ANA’s agendas are now further apart than ever. It is a shame to see. Ignoring for the moment, who is in the right or the wrong, let’s look at the document that the 4As have produced.
Yes, the 4As have done well to get 12 of the most powerful people in media into the same room to discuss issues that are at best contentious. Together these executives represent agencies controlling 90% of global media spend, so they are a powerful bunch who know if there are bodies buried and, if so, where they might be hidden.
Unfortunately, what the 4A’s has produced is a document that simply illustrates the culture gap between clients and agencies.
Even the basic glossary gets it wrong. Definitions of some of the most critical words around transparency are loose, notably the limited definition provided for the word “rebates,” which we’ve said time and again is likely to be the source of much of the confusion and frustration between client and agency.
Section 4 of the guidelines exposes even more of a culture gap. In it, the 4As states that the agency may enter into commercial relationships with media vendors on their own account that are separate and unrelated to the purchase of media. It goes further, suggesting that where the agency is paid by the vendor that the agency may consider these relationships confidential and need not be disclosed to their clients.
You might rightly ask why the agencies should have a right to keep these arrangements secret? If there is a suspicion that these commercial relationships are unduly influencing the way clients’ money is being spent in order to maximize the profitability for the agency, then you would conclude that these “secret” arrangements between agency and vendor are in fact highly relevant and should certainly be disclosed to clients.
In fact, the entire media rebate debate is very neatly illustrated by these few lines of text. The agency trade body, in Section 4 is giving agencies the green light to hide the commercial relationships they maintain in highly sensitive areas that could be construed as rebate practice.
The fact that the 4A’s guidelines specifically mention barter and content as areas where the client should have no visibility, highlights these as areas requiring further investigation.
We have long held that barter arrangements within media agencies and their selling of content to the very same vendors from whom they are buying media are both practices that would give huge opportunity for the unscrupulous agency to make sizeable hidden profits from horse-trading their clients’ billings.
In short, these are exactly the areas that need fuller disclosure, not less.
The 4As appears to be suggesting that potential lucrative barter and content arrangements between agencies and vendors are simply none of their clients’ business. I think smart clients will politely beg to differ and be asking these questions anyway.
These “guidelines” don’t help advertisers. In fact in places they potentially make getting transparency harder for the advertiser, not easier.
But maybe that’s what the esteemed members of the 4As would prefer.