“The world’s biggest advertisers have launched a wide-ranging inquiry into whether ad agencies are cheating them on fees through backroom wheeling-and-dealing,” Claire Atkinson reports in the New York Post.
The Association of National Advertisers, which represents 680 member companies including top marketers such as Procter & Gamble, Coca-Cola and AT&T, said it has hired two investigative firms, K2 Intelligence and Ebiquity/FirmDecisions, to look into allegations that huge amounts of advertising money — potentially in the billions — are being improperly transfered.
“The ANA is concerned primarily about rumors of rebates — or discounts — given to ad-buying agencies as a reward for directing more money to a particular media vendor,” the story reports. “Big agency holding companies, including WPP, Interpublic, Omnicom and Publicis, also have their own investments in digital media entities and can help them become more valuable by throwing client money their way.”
The report notes that neither practice is illegal, but adds that “marketers are clamoring for more transparency into how ad agencies are leveraging their dollars.”
The trade group’s member companies represent some $250 billion in combined media spending.
In the ANA’s proposal to the investigation firms, the group said: “There is a hypothesis that a lack of transparency could potentially result in suboptimal media recommendations, which would not be in the best interests of a client’s business.”