Ad Agency Probe Cites “Non-Transparent” Media-Buying Practices

An 8-month-long investigation by the Assn. of National Advertisers of ad agencies in the U.S. finds “pervasive” cases of “non-transparent” business media buying practices that include cash rebates that agencies don't report to their clients.

Investigators define non-transparent practices as those which leave the advertisers without enough information to assess the value of a media purchase and the associated profit margin. The 60-page report emphasizes that a lack of transparency doesn’t imply a media buy is ineffective or isn’t in the client’s best interest. But it says non-transparency makes it difficult or impossible for the advertiser to verify the value of a purchase.

The probe involved 143 interviews of current and former ad agency executives. The report cites numerous examples but doesn’t identify its sources or mention any agencies by name.

The 4A’s, a trade association of agencies, dismisses the ANA report a sensationalistic, one-sided and counterproductive to a “constructive debate” about media buying. The group, along with several major agency holding companies, is calling for ANA to reveal its sources and provide specific examples to back up the report’s assertions.

The investigation, which was requested by ANA a year ago, was conducted for ANA by K2 Intelligence LLC and Ebiquity/FirmDecisions.