ANA Report Finds Execs Knew of 'Pervasive' Use of Nontransparent Media Practices

In its much-awaited transparency report the Association of National Advertisers reveals troubling specifics to bolster its accusations of the "pervasive" use of kickbacks and rebates in an ad industry where "senior executives across the agency ecosystem were aware of, and mandated, some nontransparent business practices." The 58-page ANA study, conducted in conjunction with K2 Intelligence, was released to immediate disdain from the ad industry.

While the ANA stopped short of accusing agencies of any illegal activities, the charges are no less damaging: Agencies, for instance, have made markups on media of 30 percent to 90 percent on "principal" transactions, where an agency acts as a principal and buys media on its own behalf before reselling it to a client. Media buyers also said they were sometimes pressured or incentivized by their agency holding companies to direct client spending to that media, regardless of whether that selection was in a client's best interests, according to the ANA. Agencies haven't publicly addressed the findings yet, but companies like Publicis Groupe said the ANA had "failed" the industry by issuing a "report that relies on allegations about situations involving unnamed companies and individuals." WPP's GroupM advised, "The objectivity of [the report's] authors and advisors needs to be examined carefully ... and should not be allowed to tarnish the entire industry, nor every company in it." The 4As cited the study's "immense shortcomings," and described its findings as anonymous, inconclusive and one-sided [which] undercut the integrity of its findings."