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Will the ANA re­port af­fect the Mid­dle East me­dia mar­ket?

US ad­ver­tis­ers have crit­i­cised me­dia agen­cies af­ter an in­ves­ti­ga­tion into their prac­tices. Will they do the same here? L ast month, the As­so­ci­a­tion of Na­tional Ad­ver­tis­ers in the United States said it would is­sue new guide­lines for US ad­ver­tis­ers to beef up their me­dia agency con­tracts af­ter pub­lish­ing what it called a “trou­bling re­port” that found “non-trans­par­ent busi­ness prac­tices” are “per­va­sive”.

The US trade body did not iden­tify any agency groups or in­di­vid­u­als but sug­gested all the big agen­cies are im­pli­cated. The in­ves­ti­ga­tion found: prac­tices” and these were found to ex­ist “across the spec­trum of me­dia agency en­ti­ties”. pro­vided to agen­cies with pay­ments based on the amount spent on me­dia. Re­bates also took the form of free me­dia in­ven­tory cred­its or “ser­vice agree­ments” in which me­dia sup­pli­ers paid agen­cies for low-value re­search or con­sult­ing. ecosys­tem were aware of, and man­dated, some non-trans­par­ent busi­ness prac­tices. re­ceive re­bates or were un­aware of any re­bates be­ing re­turned. prob­lem­atic agency con­duct” con­cealed by prin­ci­pal trans­ac­tions where the agency or its hold­ing com­pany acts as prin­ci­pal to pur­chase me­dia on its own be­half and re­sells it to a client af­ter a mark-up. There were mark-ups of be­tween 30 per cent and 90 per cent in some cases. ANA chief ex­ec­u­tive Bob Liodice said the body wanted its re­port by cor­po­rate in­ves­ti­ga­tors K2 In­tel­li­gence to “be­gin a trans­for­ma­tive ap­proach to re­build­ing client-agency trust”.

Mean­while, the Amer­i­can As­so­ci­a­tion of Ad­ver­tis­ing Agen­cies de­scribed the re­port as “anony­mous, in­con­clu­sive and one-sided”.

The US has been his­tor­i­cally known as a non-re­bate mar­ket – un­like the Mid­dle East, the United King­dom and many other coun­tries, where re­bates are fairly com­mon prac­tice. By con­trast, some US ad­ver­tis­ers ev­i­dently ap­pear shocked af­ter learn­ing of their agen­cies’ be­hav­iour. Al­though the ANA re­port only looked at the state of the US ad­ver­tis­ing in­dus­try, many of the ad­ver­tis­ers and agen­cies are global, so it seems highly likely that there could still be fall­out in the Mid­dle East and North Africa. Mar­keters out­side the US are cer­tain to take a close in­ter­est in murky is­sues such as mark-ups and agen­cies trad­ing as prin­ci­pal.

In the UK, Deb­bie Mor­ri­son, di­rec­tor of con­sul­tancy and best prac­tice at ISBA, said: “It will cause all ad­ver­tis­ers to ex­am­ine their me­dia agency re­la­tion­ships and should act as a cat­a­lyst for dia­logue on the is­sues out­lined. Ev­ery ad­ver­tiser should seek as­sur­ances on their busi­ness and en­sure their con­trac­tual terms re­flect their best in­ter­ests.”

Jenny Biggam, co-founder of the 7stars, added: “It’s naïve to think the prob­lems high­lighted by the ANA re­port are unique to the US mar­ket – brands in all ter­ri­to­ries will sit up and take no­tice. This is a real op­por­tu­nity for agen­cies to change busi­ness mod­els and of­fer clients greater trans­parency.”

Tom Den­ford, chief strat­egy of­fi­cer at IDComms, went as far as ask­ing whether the cur­rent me­dia agency model needed to be ripped up. “Ad­ver­tis­ers need the facts in or­der to make more in­formed choices about what kind of me­dia agency model they want to work with,” he said. “The choice is now be­tween an agency that works as a trusted ad­vi­sor and en­tirely in the in­ter­ests of its clients for its in­come, or one that will act as a bro­ker and make its in­come from the ven­dor com­mu­nity.

“The lat­ter sce­nario is a le­git­i­mate busi­ness prac­tice, but only if clients hire those agen­cies in • “Nu­mer­ous non-trans­par­ent busi­ness • Cash re­bates from me­dia com­pa­nies were • Se­nior ex­ec­u­tives across the agency • Some ad­ver­tis­ers told the ANA they did not • There was ev­i­dence of “po­ten­tially

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