Media Buying Comes Under Scrutiny as ANA Investigates Agency Practices

Media Buying Comes Under Scrutiny as ANA Investigates Industry Practices

ANA Selects K2 Intelligence and Ebiquity/FirmDecisions to Lead Media buying Fact-Finding Effort

NEW YORK, NY — In an effort to restore confidence to the media buying supply chain, the Association of National Advertisers (ANA) has selected two independent firms to investigate industry processes and determine if media plans are being compromised.

The investigation began three years ago through an ANA member survey that revealed that media companies were kicking back money to agencies in the form of rebates that were not being disclosed to brand advertisers. The ANA, who’s membership includes nearly 700 companies with 10,000 brands that collectively spend over $250 billion in marketing and advertising, found that a wide swath of marketers had never heard of rebates or did not know that rebates were a part of their companies’ media-buying process in the U.S.

In early 2014, the ANA hired Forrester to perform another survey to explore “transparency” more broadly and found that 46% of marketers polled were concerned about the transparency of their media buys. The majority of survey respondents (63%) also believe that agencies who accept rebates from the media may not be objective with their media allocation recommendations. More than $27 billion in media planning and buying was put into review by brands this year as brand marketers began to question their relationships with agencies.

According to the ANA, the survey’s results indicated rapidly growing concerns about transparency across a variety of business practices and have prompted the hiring of K2 Intelligence, an industry-leading assessment, compliance, and cyber-defense services firm, and Ebiquity/FirmDecisions, a top marketing-performance optimization company, to lead discovery and fact-finding efforts into media transparency issues, including rebates. The two firms were selected following a comprehensive vetting process of 26 companies. In-person interviews were conducted with more than a dozen candidates.

K2 Intelligence specializes in complex business and industry assessments, business intelligence, and data analytics. Founded in 2009 by Jeremy Kroll and Jules Kroll, the company has built a reputation for advisory excellence, independence and insight to its assessments.

Ebiquity/FirmDecisions is a marketing performance specialist. Its services comprise marketing-performance optimization, advertising intelligence, research/reputation analysis, and media-value measurement, including media auditing. In 2012, Ebiquity acquired FirmDecisions, a global specialist in rebate/AVB auditing with a focus on media financial transparency.

“We believe ANA’s objectives will be best facilitated by combining a company that specializes in business examination and fact-finding with a firm that knows the industry and has superb awareness of media transparency issues,” said Bob Liodice, ANA president and CEO, in announcing the selection of the two firms. As outlined in the request for proposal, issued this past June, the essential objective of this project is to elevate trust and confidence throughout the media-buying supply chain.”

The ANA’s project calls for a multi-phased approach. Phase I will focus primarily on domestic and global fact-finding via confidential interviews with senior ecosystem executives and other business intelligence processes.

The project is expected to accomplish the following:

  • Demystify the landscape and provide a clarifying perspective on the state of transparency. This is foundational to advancing solutions and the development of longer-term quality business practices.
  • Provide industry perspective on non-transparent behavior such as rebates, barter, arbitrage, dark pools, inventory management, global transactions, and supply chain media management.
  • Assess the quality of the media-planning process and understand if media plans are being compromised.
  • Evaluate marketers’ practices and processes. Marketers should have the same level of scrutiny as the balance of the media supply chain.
  • Develop practical solutions and best-practice behaviors that can serve as industry standards.

“I am very pleased that both K2 Intelligence and Ebiquity/FirmDecisions have agreed to provide leadership for this important industry initiative,” Liodice said. “Each brings a unique perspective and a set of powerful skills and resources. We believe those assets are highly complementary and will lead us to the objective — independent insights that our industry requires.” He added that the ANA looks forward to “sharing K2’s findings with our colleagues at the American Association of Advertising Agencies (4A’s).”

As a statement of industry collaboration and cooperation, a Joint Media Transparency Task Force, comprised equally of member executives from the ANA and 4A’s, was created this past April to establish best practices in transparency. In June, a Task Force working group was established to develop a set of key transparency principles. In the coming weeks those principles, serving as a commitment to transparency by advertisers and agencies, will be jointly issued by the ANA and 4A’s.

The independent assessment will be stewarded by the Executive Committee of ANA Board of Directors. The board has made the successful completion of this study one of ANA’s top priorities.

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