Global Brands Are Taking More Control of Media Spending: WFA

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Global brands have tried to tighten control on media spending and reexamine their relationships with agency suppliers in the year since a bombshell report on media transparency from the Association of National Advertisers, according to a new survey from the World Federation of Advertisers.

The research — released this week from the Brussels-based marketing association representing members like Coca-Cola, Procter & Gamble, Unilever and national advertiser associations — said brands are making changes to their media governance practices in the areas of media transparency, viewability, brand safety and ad fraud.

The WFA attributes the more hands-on approach to the ANA's report last summer, which claimed rebates and non-transparent practices were pervasive in the U.S. media-buying ecosystem and put the relationships marketers have with their media agencies under a microscope.

The survey included 35 WFA members representing more than $30 billion in global media and marketing spending.

About a quarter of brands surveyed said they had conducted "forensic/financial/contract compliance audits" of their agencies in the last 12 months, and 21 percent said they planned to do this. Some 35 percent of respondents said they already conduct those audits.

Historically, media audits tracked the prices that an agency was paying for media and benchmarked them against competition. As digital media has gained prevalence, compliance audits — which take an in-depth look at an agency's books, including invoices, cash flow and time sheets — have become more common in Europe.

A number of brands surveyed said they had made changes to their agency contracts in the past 12 months. For instance, 26 percent added clauses pertaining to the return of incentives, defined as any kinds of discounts, rebates or service agreements given to agencies by media vendors to buy certain media, and whether those "incentives" are passed back to the advertiser.

Though some types of rebates have been common business practice abroad, other less straightforward types of rebates have become more prevalent in recent years, said Matt Green, global lead of media and digital marketing at the WFA.

The WFA has said it doesn't oppose rebates, an industry practice in which media companies provide money or volume discounts to agencies for influencing client spending toward that media company. But the group believes advertisers should receive their fair share of those discounts or payments, and that rebates shouldn't create issues surrounding conflicts of interest.

Green said transparency had been a topic of discussion internationally before the ANA report was released.

"Transparency has been a big focus internationally for a while, less so in the U.S.," he said. "It doesn't surprise me that we're seeing a renewed focus on transparency" following the ANA's report, he said.

In the study, 57 percent of brands said they had implemented viewer tracking via a third-party vendor (31 percent already had that in place); 49 percent have adopted site whitelists or blacklists where advertising should or shouldn't appear (46 percent had done so already); and 54 percent said they were now working with third-party verification companies or other partners to combat ad fraud (34 percent were doing so already).

Though trust between agencies and marketers has been a challenge, Green said he believes having these conversations will benefit the industry down the line.

"Maybe it was necessary for the industry to go through these challenges in order to be reborn in a more stable manner," Green said. "It is a process that needed to happen. We will ultimately come out in a better place."

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