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Legal Problems Plague ANA Transparency Report

The Association of National Advertisers (ANA) has teamed up with K2 Intelligence to look at the state of transparency within the ad industry.  They performed in-depth analysis of many companies and ads running on digital platforms as well as TV and print.

The report was set to be released but major companies WPP and Omnicon Group delivered legal letters that specifically requested that the ANA provide proof of their claims prior to releasing their results to the public.  Other agencies also claimed that this transparency report was not being transparent.

Executive Managing Director of K2, Richard Plansky, responded saying, “From the beginning, this has been a study designed to shed light on certain non-transparent practices in the media-buying landscape – not an investigation or an audit.  At the ANA’s insistence, this has never been about pointing a finger at any individual or company.”

The report contains a lot of information including the fact that markups on media purchases range from about 30% to 90% and that ad agency hold companies have been found to direct media spend without fully taking into account the best interests of their clients.

AdAge Columist Meghan McDonnell wrote of the report:
The report shines a light on practices that make advertisers doubt the levels of trust between themselves and their media agencies. Among the key concerns is not that the agency is making income on trading that is unreported, but that the agency is making decisions about media partners based on the prospect of cash (or services) being returned to the agency as a result of the media choice.

A key principle of a media agency’s services to a client is media-neutral planning in order to find the most “effective and efficient” media mix to achieve the goals of the client. These goals are specific to each client, so their media plans should also be specific. If media decisions are being made prior to the planning process, clients should be curious as to the elements of the plan and whether they are right for them as a brand.

This will likely lead to further trouble between brands and media agencies in the future.

Another major point found in the report is that agencies are getting large rebates from media companies.  This further calls into question the ethics used by many companies in the industry.

If you’re interested in reading the full report, it can be found HERE.

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Pesach Lattin

Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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