Rob Norman, the chief digital officer of the world’s biggest media buying company, GroupM, has ripped into the recent Association of National Advertisers (ANA) report on media agencies rebates, saying it overlooked the fact that agencies make major investments in technology at their own risk.
The long-anticipated ANA report, which last week published the results of an eight-month probe into the sector by investigations firm K2, alleged secret rebates and other non-transparent business practices are “pervasive” in the agency sector.
GroupM already issued a statement on the day of the report’s publication saying it does not take rebates in the US or accept service fees from vendors that are not disclosed to clients. The statement also suggested that the report and the “objectivity of its authors and advisors needs to be examined carefully”.
On Tuesday, Norman, who is also GroupM’s North America chairman, wrote a lengthier response to the ANA report on his LinkedIn page (which has also been published on GroupM’s website and with a selection of trade publications).
In it, he notes there is no “positive reference” in the ANA report about the investments media agencies and their parent companies have made in “technology, data, and human expertise” to help clients tackle the complexity of the US media market.
The report acknowledges the pricing pressures imposed on agencies by clients and their procurement offices. However, it omits acknowledgement that in spite of such pressure media services companies play an important role in supporting clients through a time of technology enabled radical change in consumer behaviour and media consumption.
He goes on to list the number of technology investments GroupM parent company WPP has made since its acquisition of 24/7 Real Media in 2007.
“The ANA report seems to suggest that there is something wrong with agencies being rewarded for these investments and acceptance of risk,” Norman adds.
At some point in the coming days, the ANA is set to publish a set of guidelines, compiled by media auditing company Ebiquity’s Firm Decisions, which will outline the steps marketers need to take to ensure the relationship with their agency is one of transparency and trust.
Norman ends his blog post by saying he hopes the guidelines take a balanced view of the issues within the client/agency relationship:
Of course they should encourage vigilance; of course they should encourage clients to be satisfied that these business models are delivering value. What they should ensure is that the guidelines do not have the effect of reducing investment in ‘fit for market’ technology and ultimately disadvantaging advertisers in the name of transparency
At last week’s WPP annual general meeting, the company’s chief executive Sir Martin Sorrell suggested the ANA’s report was “in no way independent” and that the trade body’s language to promote the report was deliberately “emotional and intemperate.”
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