It’s hitting the fan on Madison Avenue
EVERYWHERE, USA: It’s a nightmare on Madison Avenue.
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.
The Association of National Advertisers said Tuesday it has hired K2 Intelligence and Ebiquity/FirmDecisions to start grilling folks across the industry to get to the bottom of the allegations.
The two investigation outfits plan to conduct a series of confidential interviews with people involved in the transfer of billions in advertising dollars around the globe.
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.
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.
Neither practice is illegal but marketers are clamoring for more transparency into how ad agencies are leveraging their dollars.
“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,” according to the proposal the ANA put out to investigation firms.
The trade group said its 680 member companies, including Procter & Gamble, Coca-Cola and AT&T, represent a combined $250 billion in media spending.
“We’re searching for the truth,” Bill Duggan, the ANA’s executive vice president, told The Post. “Depending on what we find, we’ll take action, we’re not just here to pinpoint problems but find solutions.”
Nancy Hill, CEO of the agency’s chief lobby group, the American Association of Advertising Agencies, said in a statement: “While the 4A’s favored the continuity and effectiveness of our joint efforts, the ANA has decided to move forward with its solo sponsorship of a fact-finding initiative into agency media practices.
“The 4A’s will continue to collaborate with ANA on media transparency to the fullest extent feasible.”