Dive Brief:

• The Association of National Advertisers (ANA) and cyber-defense firm K2 Intelligence spent several months looking into transparency issues within the advertising industry and on Wednesday finally released the final report. It comes days after results that ad agencies were getting rebates from media companies were made public and after a number of major agencies filed legal letters to postpone the report’s release.
• Although agency cash rebates was the big news from the report, other findings included uncovering non-transparent business practices that senior executives at ad agencies were aware of across media such as digital, print, out-of-home and TV.
• The study was stewarded by the Executive Committee of the ANA Board of Directors in order to “demystify the landscape and provide a clarifying industry perspective on non-transparent behavior like rebates, understand the role of holding companies and their levels of engagement, understand if media plans are being compromised, and understand marketers’ practices and processes affecting agency behavior.”

Dive Insight:

Before the report’s release WPP and Omnicon Group sent legal letters asking the ANA to back up its claims before formally providing the results to the public, and as Bloomberg reports, afterward other agencies pushed back stating the transparency report wasn’t transparent.

Richard Plansky, executive managing director of K2 Intelligence, said in a statement, "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."

ANA CEO Bob Liodice also said in a statement that vast changes in the complex digital ad supply chain and surrounding technology as well as the resulting increase in media outlets has given agencies opportunities to increase profit margins beyond agency fees. He said, “This has led to disconcerting conflicts of interest and a lack of transparency."

The report found that markups on media ranged from 30% to 90% and that ad agency holding companies at times would direct media spending without taking into account marketer clients’ best interest. The ANA’s findings are likely to create more mistrust and friction between brand-side marketers and their agency partners.