the American 4A’s agency trade body is still at loggerheads with the Association of National Advertisers (ANA), pulling out of an ANA panel on ‘transparency’ at Advertising Week in New York next week, preferring to do its own thing at the chat fest.
4A’s president and CEO Nancy Hill (below) (who’s stepping down soon, who can blame her?) has announced that the trade body’s own recommendations in its Transparency Guiding Principles of Conduct (TPGC) report are now mandatory – whether advertisers think they’re sufficient or not. The ANA is formulating its own tablets of stone.
Point 4 in the 4A’s charter seems to be the problem. In full this reads (their emphasis):
4. The agency, (agency group and holding company) may enter into commercial relationships with media vendors and other suppliers on its own account, which are separate and unrelated to the purchase of media as agent for their clients.
The agency is paid by the media partner for services provided, such as barter, content production or research projects. Where this is the case, the agency may consider such relationships confidential and commercially sensitive.
The agency should disclose, on a confidential basis to the client, the general type of commercial relationships and explain the controls and procedures it has in place to ensure that these relationships are on an arm’s-length basis. These commercial relationships reflect services provided by the agency, are kept separate and do not promise or commit to client spending.
It should be clear that the agency’s commercial transactions do not influence communications and media planning and investment recommendations for the client, which should be done on behalf of the client and according to the client’s stated objectives.
If the agency recommends any proprietary media (including pre-owned agency inventory) on a media plan, it should be disclosed as such and if approved by the client, it should be documented with an opt-in agreement.
Also relevant is point 5, the main bit being:
5. The agency should disclose and seek the client’s acknowledgement of any agency’s ownership interest in any entity and details of any of its employees who are directors of any entity that the agency recommends or uses as a provider of products or services to the client. In such cases, when the recommendation is made, the agency should demonstrate that the recommendation is as good as, and preferably better than, other independent alternatives that may be available to the client.
‘Transparency’ is code for media rebates and the 4A’s point 4 above clearly states that they’re OK and none of the client’s business unless their contract specifies otherwise. One doubts that the ANA will lever be happy with this although the big holding company owned media agencies will be. So the stand-off continues.
Given that ‘media investment management,’ as WPP likes to call it, essentially uses the client’s money it’s a rather strange state of affairs when their agencies treat it as their own in certain circumstances, confidentially too.
But such ‘management’ accounts for the greater part of most of the holding companies’ profits.
It’s a funny old world and Ms Hill is probably best out of it. Not that long ago the most clients had to moan about was creative agencies marking up production budgets. Those were the days…