Collaboration Between Trade Groups Hits Snag as 4A's Releases Transparency Code

Agency Group Maintains Prescribing Contract Language Should be Left for Discussion Between Agencies and Clients

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Collaboration between the 4A's and Association of National Advertisers has once again hit a snag, prompting the 4A's to release its "Transparency Guiding Principles of Conduct" alone.

Nancy Hill
Nancy Hill Credit: Courtesy 4A's

"Despite the fact that a joint task force between leading advertisers and agency leaders set out to address the issues of transparency together, the 4A's is issuing these principles to its members without further delay," the organization noted in a press release. "While that collaboration between marketing and agency leaders led to the development of these principles, ultimately the groups could not come to terms on language. The advertiser group sought to go beyond developing guideline language into prescribing contract language; the 4A's believes that should be left for discussion between individual agencies and clients and does not believe that is the role of an industry trade association."

"Transparency and trust form the bedrock of any relationship, and the agency-client relationship is no different," said Nancy Hill, president-CEO of the 4A's, in a statement. "It is critical that the industry come together to formalize guiding principles to best serve clients and address these issues. We are confident these guidelines will serve as a solid foundation for continuing relationships based on trust between agencies and clients moving forward."

The release goes on to acknowledge that the principles were created "with considerable input" from advertisers, including L'Oréal, Bank of America, MasterCard, ConAgra, Boehringer Ingelheim, Target and Nestlé.

But those organizations, and their trade organization, haven't endorsed the 4A's principles, said ANA CEO Bob Liodice. "We attempted to work with the 4A's to see if we can start to come up with what we think are principles of behavior that make sense for both sides, in advance of those particular findings," he said, referring to the ANA's ongoing investigation into the rebates.

The issue dates back to March, when former media agency executive Jon Mandel used a speech at an ANA event to allege that media agencies were letting undisclosed rebates from vendors influence their work on behalf of clients. It sparked the creation of a joint task force between the ANA and the 4A's to develop principles for agency-client contracts.

"The fact is we didn't reach an agreement," Mr. Liodice said. "We didn't feel the principles were strong enough or complete enough that it would allow us to endorse what was taking palce. We made a good-faith effort and agreed to disagree. What was particularly troubling was that in [today's] release, [the 4A's] acknowledges contributions from ANA members. The implication that the ANA members are endorsing that is blatantly false."

The feud between the organizations started back in October, when the ANA hired two firms to investigate the issue.

"While the 4A's favored the continuity and effectiveness of our joint efforts, the ANA has decided to move forward with its solo sponsorship of a fact-finding initiative into agency media practices," stated Ms. Hill at the time. "We look forward to the ANA's findings and the release of the transparency principles so that our industry can move forward with a framework designed to accommodate the individual requirements of today's advertisers."

At the time, she had also said she hoped the two organizations could work "collaboratively as part of a joint task force with ANA members to develop industry transparency principles."

But once again, that collaboration has fallen short, and the 4A's is releasing its guidlines alone. The guidelines are broken into three parts: client-agency-retained relationships for U.S. media planning and buying services; separate commercial relationships among agencies and media vendors and other suppliers; and client-agency governance.

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