For better or worse, 2016 was a landmark year in advertising. To mark its conclusion, Campaign US is highlighting 10 people we believe are essential to understanding how it all went down. We will be counting down our choices starting on Dec. 9, with our No. 1 most essential person revealed on Dec. 22. Click here to see the list as it is revealed.
In June, Bob Liodice compared the American Association of Advertising Agencies’ (4As) dismissal of his group’s transparency report to the Cold War. As the head of the Association of National Advertisers, Liodice had reason to make such a comparison. After all, the 58-page report challenged something integral to the entire industry: how agencies make money.
"Rebates is not a dirty word; it really isn’t," he told Campaign. No one complains about getting a rebate at a car dealership, he noted. "What we object to are non-disclosed rebates. Forget about the word rebates, and just take the broader umbrella of non-disclosed financial transactions that are taking place without the marketers’ knowledge."
The transparency debate can be traced back to the ANA Leadership Conference in 2015, at which former Mediacom CEO Jon Mandel declared kickbacks and rebates widespread across the industry. Soon after, the 4As and the ANA joined together to examine the issue of transparency. But in January, the 4As came out with its own set of guidelines, signaling a rift between the two groups. For its part, the ANA teamed up with K2 Intelligence and Ebiquity/FirmDecisions to investigate just how murky the agency world had become. This past summer, it released its findings, and "non-transparent business practices were found to be pervasive."
But according to whom? The ANA report consisted of 150 anonymous sources, which prompted immediate attacks by the aforementioned 4As and Publicis CEO Maurice Levy, who called the ANA study "an unwarranted attack on the entire industry." Liodice stood firm in the ANA findings, and he even found some allies on the agency side: Cincinnati-based Empower MediaMarketing resigned from the 4As, and Dave Smith from San Francisco agency Mediasmith issued his own "Marketer’s Bill of Rights."
"K2 had no stake in the game," Liodice said in defense of the study. This was an "objective, independent, fact-finding exercise." The research firm’s mission was to tell the industry what it learned, he said, adding "no company is going to present to ANA’s Board of Directors several times and not tell the truth."
Today, people repeatedly ask Liodice if he’s seen change since the report’s release, and it’s a question he’s happy to answer. "Yes, we are. What we are seeing is a return to fundamentals," he said, although he admits that change not as broad-based as he’d like. While he won’t name names (you won’t see this in the press, he said, because companies don’t want to admit wrongdoing), Liodice has had conversations with CMOs and cites anecdotally that contracts are being redrafted and more attention is being given to training staffs in all things digital (so there’s less outsourcing).
But don’t expect Liodice to see these small wins as enough of a victory that he’ll move on. "I will absolutely validate that the ANA Board of Directors has acknowledged that this is not one and done," he said, adding that the ANA will release another report in 2017 or 2018. "We will keep this front and center. We will dig through different tunnels to find out even more of the story. I will tell you that the World Federation of Advertisers is also looking at different stories. This issue isn’t going away."