• by Bob Liodice , July 19, 2017

One year ago, the ANA (Association of National Advertisers) released two landmark reports on the critical issue of transparency in the digital media ecosystem.  The first report, “An Independent Study of Media Transparency in the U.S. Advertising Industry,” revealed a wide range of non-transparent business practices.  The second, which the ANA did in conjunction with Ebiquity/FirmDecisions, was called “Media Transparency: Prescriptions, Principles, and Processes for Marketers” and provided advertisers with a set of recommendations to address the issues identified in the first report.

I can now report that one year later, a new ANA survey has found that a majority of ANA members have taken a wide range of steps to address the transparency issue.

In the survey, conducted during the week of July 10, we asked:

One year ago, ANA issued its reports on media transparency.  That consisted of a “findings” report from K2 Intelligence on media transparency and a “solutions” report that provided advertisers with a set of recommended principles and processes for addressing the transparency-related issues identified by K2.  In the past year, has your company taken any action steps to address media transparency issues?  

More than 190 ANA members responded and 60 percent indicated their company has taken action steps to address the transparency issue, while 15 percent answered “No” and 25 percent responded “Not Sure.” 

In an open-ended follow-up question we asked: 

• “What action steps has your company taken to address media transparency issues?” 

More than half of those who said they had taken some kind of action indicated they had revised the contracts they have with their media agencies. Representative responses included: 

• “We have improved our contract language.”
• “Revised our MSA with the media agency AOR.”
• “Used ANA/Reed Smith media-transparency language as a guide in drafting contract with our new media agency.” 

The most cited action step following contract revisions was audits, with about 20 percent of respondents indicating they had conducted audits, while changes to programmatic buying practices to increase transparency was the third most reported step. 

For those respondents whose companies had not taken any steps to address media transparency issues, the most cited reasons for not doing so were having limited resources and the belief that transparency is not an issue. Representative responses for the latter were: 

• “We believe that we have a good relationship with our agency and that there is no problem.”
• “Not an issue in our business. Sufficient transparency exists already.” 

ANA Perspective 

We applaud ANA members – one year later – who are now paying close attention to the advertiser/agency contract. The contract addresses areas including the right to audit and opt-in agreements for programmatic buying. The ANA, in conjunction with its General Counsel, Reed Smith LLP, has developed a media agency “Master Media Planning & Buying Services Agreement” which can be used by advertisers in developing their own agency agreement. 

A key finding of the original transparency report, done in collaboration with K2 Intelligence, was that a “fundamental disconnect” existed in the industry regarding the basic nature of the advertiser/agency relationship. In general, advertisers expressed a belief that their agencies were duty-bound to act in their best interests. They also believed that this obligation, essentially a fiduciary duty, extends beyond the stated terms in their agency contracts. While some agency executives expressed similar beliefs, many others told K2 that their relationship to advertisers was solely defined by the contract between the two parties. 

K2 Intelligence found evidence of situations where media agencies sought to avoid explicit contract language in order to preserve their ability to retain various types of incentives. The K2 report also showed that many advertisers have contracts that are unsigned by the parties, contain ambiguous or "gray" areas and have not been adapted relative to the rapidly changing media landscape.  Other findings revealed that many contracts contain opt-in agreements that limit advertisers' rights and have inadequate audit/review rights as well as inadequate enforcement of audit/review rights. 

While our survey shows that progress is being made, there is still a good amount of work that remains to be done. Those advertisers who have not taken action steps to address media transparency issues are strongly encouraged to do so. Even the most sophisticated advertisers – including some members of the ANA board of directors– have uncovered transparency issues when they took the time for close examination. 

Perhaps Marc Pritchard, current ANA Chairman and Chief Brand Officer at Procter & Gamble said it best at the 2017 ANA Media Conference when he stated: “I started digging into the details and learned a very valuable lesson. Media transparency can’t be delegated.  The CMO needs to work with all of their media and marketing partners to lead, and that means getting into the weeds, setting expectations, following through, and be willing to break some furniture every once in a while.”