ANA 'Regrets' Implication All U.S. Media Agencies Get Undisclosed Rebates

Group Says It Didn't Mean To Tar All Shops With One Brush, But Will Not Back Down on Controversial Issue

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The ANA's Bill Duggan
The ANA's Bill Duggan

The Association of National Advertisers issued a statement today walking back implications from a controversial presentation at its Media Leadership Conference last week regarding widespread agency rebates in the U.S.

"While the ANA cannot specifically identify the breadth and scope of such practices, we regret any impression that agencies in general are engaged in questionable activities and apologize to those who were offended," the group said in a statement. "It was certainly never the intent of the ANA to make any sweeping statements of widespread agency participation in any questionable practices."

Bill Duggan, ANA group exec VP, said the talk had spurred further discussions with the 4A's, the main association of ad agencies. And while he said it wasn't the ANA's intention to accuse all agencies, the group also isn't planning to back down from efforts begun in 2013 to shine more light on the rebate issue in the U.S.

"It really wasn't until the presentation last week that we seemed to get the attention of the industry, as controversial as some thought it was," Mr. Duggan said. "So to some extent, our mission was accomplished."

Jon Mandel
Jon Mandel Credit: Darryl Estrine

Jon Mandel, former CEO of Mediacom and now CEO of media consulting firm Dogsled Enterprises, delivered the presentation, which included input from four other consulting firms. Within the presentation, he cited an unnamed top sales executive from "a major media company" on rebates in the U.S. as saying: "It's pervasive. It is throughout the top six holding companies and extends far beyond them."

On that panel, Mr. Mandel also said: "It happens in all media to varying degrees. It's different by agency and holding company. And it's been happening in a big, very formal way, for more than a decade. I've seen this movie. I lived this movie. It's part of the reason I'm not doing it anymore. It is huge. It's well into nine figures annually across the industry."

Rob Norman, CEO of GroupM, which owns Mediacom, said in a response to Mr. Mandel's presentation last week that GroupM has no rebates or other revenue it hides from clients in the U.S.

Speaking by phone on Tuesday, Mr. Mandel said he believes not every agency is guilty. "Some people came away thinking I was saying every single agency in the universe does this," he said. "There are some agencies that do not do it." He declined to say which, because he said the list would inevitably leave some smaller ones out.

Mr. Mandel also said he'd received around 100 emails of support, largely from media or ad-tech companies, since reports of his presentation. He cited one from an ad-tech executive he declined to name who said it was routine for his company to be blocked out of deals with media agencies because competitors were paying 10% rebates to offshore affiliates of their holding companies that wouldn't be subject to terms of U.S. client contracts.

A 4A's spokeswoman said the group would stand by its statement last week after the presentation from CEO Nancy Hill, who said: "We have not been shown any data or information that warrants such allegations. Our position is that the financial arrangements between agency and client are just that, between those parties and confidential."

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