ANA Issues Long-Awaited Agency-Client Transparency Guidelines

4A's Issued Its Own Guidelines in January Following Breakdown in Joint Task Force With ANA

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ANA President-CEO Bob Liodice
ANA President-CEO Bob Liodice

The Association of National Advertisers is calling for marketers to diminish "non-disclosed agency activities" in long-awaited transparency guidelines prepared on its behalf by auditor Ebiquity.

In October, the ANA hired Ebiquity as well as investigative firm K2 Intelligence to investigate allegations that agencies were collecting rebates from U.S. media-buying deals.

"The purpose of these guidelines is to provide marketers with prescriptions for addressing transparency issues specific to the K2 Intelligence study," said Bob Liodice, ANA president and CEO, in a statement. "We outlined actions marketers should consider to diminish or eliminate non-transparent and non-disclosed agency activities and to ensure that their media management processes are optimized."

K2 issued its 58-page report on behalf of the ANA last month. The investigative firm found that rebates, including "cash rebates," and "other non-transparent practices" are pervasive in the U.S. media buying ecosystem.

Now the ANA is recommending that clients require their agencies to "disclose all potential conflicts of interest and allow thorough audits of the agency, its parent company, affiliates, and subsidiaries to ensure full transparency and contract compliance," according to the new report.

The association is suggesting that marketers and agencies use a contract template created by the Incorporated Society of British Advertisers and adapted for the U.S. marketplace by ANA general counsel ReedSmith.

The ANA also wants clients to take control of their data, as well as the media technology used on their behalf. And each year, at a minimum, the association is calling for advertisers to review all contracts and "ensure they are fit for purpose against the advertiser's business objectives, using internal and/or external legal counsel as required."

And the association recommended a joint "code of conduct" for marketers and agencies, in which both parties agree to work on bettering various facets of the relationship, such as articulating clearly the relevant business objectives and negotiating in good faith.

The issue dates back to March 2015, 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 agency trade association to develop principles for agency-client contracts.

The 4A's own guidelines
The task force, and principals, didn't pan out. The 4A's disagreed with the ANA's approach to hiring the two firms, and its stance that the principals should go so far as to recommend contractual language between client and agency.

The 4A's in January issued its own guidelines for maintaining transparent agency-client relationships, continuing an already tumultuous relationship between itself and the marketer trade group. Following Mr. Mandel's presentation, the two organizations said they would work together, through a joint task force, on investigating the issue and developing guidelines for agencies and clients.

In a press release, the 4A's said: "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."

The 4A's guidelines were 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.

"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," Ms. Hill said at the time.

"The fact is we didn't reach an agreement," Mr. Liodice then. "We didn't feel the principles were strong enough or complete enough that it would allow us to endorse what was taking place."

In a response to the ANA recommendations on Monday, the 4A's seemed to show an interest in patching up the tarnished relationship and moving on.

"It's a top priority of the 4A's to review this report thoroughly as it could affect many of our member agencies," Ms. Hill said in an e-mailed statement. "We plan to share specific steps and insights in the near term. As we stated in an earlier letter, we will propose sitting down with the ANA to explore common ground and try to address important questions and concerns regarding media buying practices for both agencies and marketers."

Bill Koenigsberg, CEO of independent media agency Horizon and chairman of the 4A's, said in a separate e-mail, "We intend to look at the Ebiquity suggested template in great detail and then regroup with the ANA to find common ground in terms of moving the industry forward. We do not live in a one size fits all environment today so creating space for individualized agency/client relationship negotiation needs to be taken into consideration as well."

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