ANA report: Agencies are toxic by association

I could tell you now about the global agency chief who makes very public homophobic jokes at the expense of a gay colleague; I could tell you about the married boss who is sleeping with two juniors (same bed, same time); I could tell you about the marketing chief who regularly feeds his appetite for drugs at his agency's expense.

I could tell you all sorts of things and, as long as I don’t mention any names and keep it general, I can be pretty sure no-one’s going to sue my ass or get fired or even know whether I’m making the whole thing up or not. But if I tell you stories like these, every time you meet a dinosaur global agency chief or a louche local boss or a chief marketing officer with a sniff, you might wonder if they could be the one…

That’s one reason the report by the Association of National Advertisers in the US into undeclared rebates on media trading is so toxic. The ANA has found widespread evidence of rebates being paid to media agencies and not passed back to the client. The report does not identify any individual agency or holding company but makes clear that "non-transparent" behaviour occurred "across the spectrum" of agencies. It potentially implicates everyone while allowing all agencies, including the guilty, to claim they’re not at fault. 

Cost pressures on media agencies are more intense than ever. They’re investing more in skills and technology while fees paid by clients are being squeezed. More clients are promising investors that they’re reducing their "non-working" marketing expenditure (which generally includes agency fees) while increasing their "working" media spend. Nice soundbites for the City but, for agencies, it’s more work for less money. Let’s be clear, none of this is any excuse for malpractice, but it does raise the very real issue of governance. The ANA report suggests that while some questionable media practices might not actually be illegal, they are concerning because marketers were unaware of them. As one very, very senior media executive told me this week: "If a marketer is unaware of what media agencies are doing with their money, then they deserve everything they get – or rather they deserve to not get everything they should get." 

When I first started out writing about marketing, some of the most powerful people in the industry were the media controllers who sat inside big client companies policing the media spend, feared and respected in equal measure. The media controller role in many organisations has since withered to a back-room job or disappeared altogether. But the smart marketers know how their media spend is allocated, know how their media agency is remunerated, pay them fairly for the complex job they do and have a contract of trust, not just legalese. And they know that when they meet with their media agency next week, they won’t be wondering if they could be the one…      

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