And WPP CEO Martin Sorrell argues that Ebiquity, the media auditor working with the Association of National Advertisers (ANA) and K2 Intelligence on the U.S. media transparency report, is ”heavily conflicted" because its subsidiary, FirmDecisions “audits whether agencies have complied with their contracts with advertisers while other parts of the business manage pitches for clients, advise them how to 'secure better prices' and audit media spend,” according to Gideon Spanier, writing on US Campaign.
The legal action disputes “the potential breach of a non-disclosure agreement involving ‘four or five’ different confidential documents that were sent in error to the auditor by Group M agencies,” writes Spanier.
The incident goes back to 2014, but it looks like WPP/Group M kept it up their sleeve for when it would come in handy. Which is ironic, given that the crux of the case involves a comment made by a Firm Decisions Australia employee about keeping a Group M document up their sleeves for later use.
So now it is 2016, and the K2 bomb has gone off. Ebiquity is heavily involved in providing K2 guidance in its investigations, as well as being charged by the ANA to develop a set of contract recommendations for its members to use in media agency negotiations. It would seem convenient for agency holding companies to sow some seeds of doubt about Ebiquity’s integrity.
The whole case is of Group M’s own making, it seems, as apparently it sent confidential client documents to Firm Decisions Australia in error back in 2014. Once the company realized its mistake, it asked to have the documents back, which Firm Decisions agreed to. Firm Decisions also reprimanded all employees involved in the potential “Keeping-Documents-Up-Their-Sleevesgate.”
Sorrell also said “We don’t think Ebiquity is an auditor” -- again, as cited in the US Campaign post (from which all further quotes come). What does Sorrell recommend to marketers interested in media auditing? “We think, for audit purposes, you should use a professional auditor, i.e. one of the ‘Big Four’ firms” — by which he means Ernst & Young, PwC, Deloitte or KPMG. The problem with these firms’ media auditing credentials? They simply do not have the in-house subject matter experts to conduct media audits in most markets.
Funnily enough, Firm Decisions’ Stephen Broderick agrees that his company is not an auditor: "What we’re asked by our clients to do is not statutory auditing. What clients ask us to do is to carry out financial compliance contract reviews…. All of the senior staff at Firm Decisions are chartered, qualified, certified accountants, so they are all regulated by their own industry body.”
So everyone agrees that Firm Decisions isn’t an auditor in the financial sense. It is, however, a very credible media auditor that reviews agency contract compliance, media plans and cost quality for many clients around the world. And according to Debbie Morrison, a director at ANA sister organization ISBA in the U.K., specialist media auditors do a fine job for many U.K. advertisers (as they do for many U.S. advertisers). She says: “We don’t hear any complaints about them, so why change now?"
I think there’s a place for financial auditing when, as a marketer, you want to ensure your budgets are managed responsibly and in compliance with the laws of the land that govern these budgets (Sarbanes-Oxley, for instance). And there is absolutely a place for specialist media auditors who understand the inner workings of media strategy, planning, buying and costs.
None of these legal maneuvers should distract from the real issues highlighted in the ANA report, nor should they call into question the investigators’ credibility. Perhaps departing Association of American Advertising Agencies president Nancy Hill can mend the fences, tear down the walls and rebuild the partnership that once existed between advertisers and their agencies. Wouldn’t that be an amazing legacy?