TLDR: For those who still have doubts (or are having doubts for the first time) about business practices in advertising, we recommend the latest report by US advertisers. It doesn't really say anything new. Here are the results and download.
The study
The Association of National Advertisers (ANA) contracted K2 Intelligence to conduct a "Bureau for Cyber Defense and Investigation" confidential interviews.
Respondents were interviewed between October 2015 and May 2016 :
- 29 advertiser
- 57 media suppliers and ad tech vendors;
- 38 agency professionals, both current and former, including representatives of all AgencyHolding Companies;
- 10 trade association representatives; and
- 16 other individuals (consultants, industry legal counsel, independent barter companyemployees, post-production professionals)
The study was published on ana.net, where it can also be downloaded free of charge in exchange for address data.
Results in short form
Here are the findings for the US market, formulated in a politically balanced way, in the original and translated.
1. "There Is A Fundamental Disconnect In The Industry Regarding The Basic Nature Of The Advertiser-Agency Relationship".
There are fundamentally different perceptions of the agency-advertiser relationship.
2. "K2 Found Substantial Evidence of Non-Transparent Business Practices in the U.S. Market in the Form of Rebates."
There is substantial evidence of non-transparent business practices in the form of rebates.
3 "K2 Found Substantial Evidence of Potentially Problematic Agency Conduct Concealed By Principal Transactions."
Potentially problematic agency behavior can be extensively documented and is masked by self-interest bookings
4 "K2 Found Evidence of Non-Transparent Business Practices in the U.S. Market Arising from Agencies Holding or Soliciting Equity Stakes in Media Suppliers."
Non-transparent business practices by agencies in the form of shareholdings in media providers (marketers) are provable.
The conclusion
"Conclusion: Within the Sample Studied by K2, Non-Transparent Business Practices Were Found to Be Pervasive."
Media buying in the USA is permeated by Corruption Intransparency.
Factors favoring further proliferation of non-transparent business practices include:
- Price pressure from advertisers
- Growing confusion in the media buying landscape
- Limited audit rights
What is not being questioned is the role of advertisers themselves.
Yes, price pressure is a factor, but it exists in every properly managed supply chain. So what is the point of this supply chain being in such a state?
The entire study is also available here for direct download.