Markets get nervous on Ad Agencies ahead of long awaited ANA report on media kick-backs
It’s taken eight months, but is seems the Association of National Advertisers (ANA) is finally ready to release its eight month investigation into US media agency rebates. Its apparent pre-release briefing to a number of trade publications and newspapers suggests that it has uncovered ‘Non-Transparent’ practices, including claims that agencies are collecting media rebates from vendors based on deals they make in the U.S., “according to industry executives”. The problem however is that those reporting on this clearly have not yet actually seen this report, which apparently will fail to identify the alleged culprits, which therefore also implies that it will be short on specific evidence. Understandably, a number of agency groups (OMC and WPP so far) have challenged the ANA to disclose its findings for scrutiny which now puts the onus back on the ANA to back up its claims or withdraw them.
With marketing budgets already unsettled by macro-economic uncertainties, the ongoing excuse of Brexit and even Zikka concerns over the Brazil Olympics, this has not been a great start to the year for marketers. Agency disputes regarding rebates however are not new and compared to the catalogue of illegal behaviour perpetrated by the financial industry is not the most important issue facing marketers. For those actually trying to reach consumers via the internet, the issue of ad fraud is far more serious. Indeed, such is the problem that Facebook killed an important buying platform in Atlas after finding around three quarters of the volume coming into its exchange was bad inventory. In March, its head of ad Tech (Dave Jakubowski) wrote:
“We knew that in good conscience, we couldn’t sell what Atlas and our people-based measurement told us was valueless. Unfortunately, those ads were almost certainly dumped into another low-quality exchange where all of them were most likely purchased.”
You can buy reach, you can buy clicks, but ultimately these are meaningless unless they lead to a measurable interaction such as a conversion into a transaction. While you friendly ad sales agent may tend to advise patience in running with a campaign, the speed at which one can measure the effectiveness of buying a piece of inventory means that advertisers can be very intolerant of an ineffective ad campaign and very quickly. As an advertiser, what is important is the ROI on a campaign rather than whether the agency is getting a rebate. The danger for the agency however is that if it gets caught and also fails to deliver effective inventory, then it is toast.