Those ANA Reports -- The Battle Begins

Their stated reason amp160that the ANA should have conducted a collaborative investigation involving their trade body the 4As amp160doesn39t make any sense Why would you conduct an investigation into suspected wrongdoing alongside a body representing those organizations you suspect of the wrongdoing How could anyone believe the outcome of such an investigationNo names are included within this report which has led the agenciesamp160and even the AdContrarian to conclude that the whole industry is being damned the innocent with the presumed guiltyK239s conclusions are not good for the agencies Rebates and nontransparent practices are found to existamp160and to be quotpervasivequot not isolated not occasional lapses but quotpervasivequotEqually damning is the conclusion that quotmedia buyers sic were sometimes pressured or incentivized by their agency holding companies to direct client spend to this media regardless of whether such purchases were in the clients39 best interestsquotamp160In other words planners are told to spend money in certain channels that deliver benefits to the agency even if such channels are not right for the clientamp160This chimes with what Jon Mandel said last year His speech too was based on interviews with those in the industryAnyone with even a fleeting relationship with agency planners including bloggers knows this happens It39s hard to argue that this behavior is strictly noncontractual unless you believe as many do that agencies have a general obligation to serving their clients39 best interests whether defined within a contract or notThe WSJ had already leaked some of the findings before the ANA big reveal a significant point given that the WSJ39s core audience is the CEO39s whose businesses employ agencies and whose budgets sustain all adsupported media channels This is a story that will get attention in the boardroomAs the agencies39 main line of defense looks like it39s going to be that everything they have done is in line with their contracts those signing those contracts could be in for an uncomfortable few weeksamp160Agency contracts may seem designed to confuse and to allow them the agencies a pretty free hand But that is no excuse for waving these things through or for not reviewing them for many yearsThose agencies who have commented to date have accused the ANA of a range of sins A Publicis statement said quotThe ANA has failed its members advertisers agencies and the entire industry by releasing a report that relies on allegations about situations involving unnamed companies and individuals to make broad unsubstantiated and unverifiable assertionsquotHad Publicis and others collaborated the report might perhaps have been less quotbroad unsubstantiated and unverifiablequotThe 4As said quotThe immense shortcomings of the K2 report released today amp160anonymous inconclusiveamp160and onesided amp160undercut the integrity of its findingsquotamp160That is frankly ridiculous K2 conducted 150 interviews No doubt they would have liked to have done more but fiveamp160out of sixamp160of the top holding companies the backbone of the 4As membership refused to collaborateAnd now the 4As is saying the findings the picture emerging from 150 individual interviews is quotonesidedquotIt would have taken a remarkable degree of organization for all 150 interviewees not to mention those conducted by Mandel last year that39s real peopleamp160who have experience in these matters to have simply invented the practices outlined by K2 especially as some of them were supported by signed documentary evidenceThere is a general suggestion that names and details should be passed to the holding companies amp160the same holding companies thatamp160refused their staff the opportunity to take partWhat would they do with these names and details except pursue the people concerned possibly through the courtsSo what is going to happen nextamp160This has the whiff of a disaster for the large holding companies39 media divisions The light and shade surrounding the contractual rights and wrongs along with the many lawyers39 arguments will I fear largely be ignored over the coming weeks Today39s media after all is all about headlines and moving onWhat will be remembered is that contract or no contract the agencies stand accused of hiding rebates and that it is the size of these rebates rather than the planned effect of the advertising placed on their clients39 behalves that dictates where large chunks of money are spentMaybe the holding companies that have been so quick to comment should undertake a quiet considered investigation within their own organizations as a first step towards identifying and then sorting out any malpractices that might existOne consequence seems likely to be a wholesale redrafting of advertisers39 contracts with their media agencies That is surely far better done collaboratively rather than in an atmosphere of mudslinging and abuseGiven it is the media divisions that contribute the largest margins to their holding companies the agencies would be better off doing less complaining about onesided unsubstantiated findings and more collaborating with their clients to ensure they39re fairly paid for the work they doEditor39s Note A shorter version of this post appeared June 7 on Mediatel39s NewslineThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated bloggers amp160amp160

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Those ANA Reports -- The Battle Begins

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Brian Jacobs

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