Dive Brief:
- According to the Wall Street Journal, an eight-month probe by the Association of National Advertisers (ANA) has found that ad agencies receiving rebates from media companies is indeed widespread in the industry.
- The rebates rewarded agencies for buying a certain amount of advertising space or time, and the result of the ANA is probe is almost sure to stoke more friction between marketers and their agency partners.
- WPP and Omnicom Group have both sent legal letters to the ANA asking the organization to back up its claims, postponing the release of its findings, according to Ad Age.
Dive Insight:
To a certain extent, the marketer/agency relationship has always been something of a marriage of necessity, a state that digital marketing and programmatic buying has made less necessary in recent years.
In fact, advertisers have been rethinking and putting agency relationships under review at a record pace, with 2015 seeing more agency relationships under review than the previous three years combined. Part of this process stemmed from marketers understanding they are holding more cards than agencies since they aren’t quite as dependent as in the past. It is also due to companies looking to reduce costs and wasteful spending.
The ANA probe will likely do nothing to ease marketers’ concerns that agencies aren’t being completely upfront in the business practices, particularly if they are receiving better media rates due to the rebates than they are reporting to marketers in their account reports.
Although a number of agencies condemned the findings, one anonymous marketer who attended the ANA briefing on the probe told the Journal, "There was some belief that this was just one bad apple, but it seems to be pervasive."
