- Flickr CC/Jared Hansen
A report that alleged the ad agency industry uses “pervasive” non-transparent business practices, such as taking secret rebates from media companies and not disclosing them to clients, rocked Madison Avenue on Tuesday.
The report, from the Association of National Advertisers (ANA) claimed its investigation found “evidence of a fundamental disconnect in the advertising industry regarding the basic nature of the advertiser-agency relationship.”
The ANA report did not name individuals or companies, but instead outlined some of the non-transparent practices the investigations firm it had commissioned to conduct the study, K2, had found during its eight-month probe into the sector.
Advertising agency holding groups that have responded to the report’s publication so far have denounced it as “insubstantive,” “inflammatory,” “unverifiable” and had the potential to “tarnish the entire industry”. (You can read all the agency holding group’s statements here.)
However, a former US ad agency worker, who is now a marketer at a US company told Business Insider they found the report “unsurprising” because they claim to have witnessed many of the activities outlined in the report first-hand.
Here is their full response to the ANA report. Our source asked to remain anonymous:
While some of today’s headlines called the ANA report “sensational,” “a bombshell,” or “unfair,” to me as a 15+ year veteran of the advertising industry, most of those spent in the agency world, this report was just “unsurprising.”
That in itself is a sad statement.
I know these things happened because I saw them happen every day for years.
It’s interesting to hear the holding companies deny the claims, as I know that many of the things in the report aren’t “claims,” they’re true statements that I myself could have made (although I was not involved in any way with this report).
There are, after all, actual documents and contracts out there that outline these practices in writing!
The call for names and sources [as the ANA’s report did not identify any individuals or companies involved in this alleged non-transparent practice] is scary for everyone involved because we’re all just small players up against these huge, global holding companies.
Our careers and relationships could be at stake if we come forward publicly.
The most we can hope for is that there is now some insight into this widespread problem and that it opens up a much-needed dialogue between agencies and their clients.
It’s now up to all marketers to educate themselves on the prevalence of undisclosed mark-ups, hidden fees, kick backs, rebates, and transparency.
Talk to your agency partners, and perhaps even more important, talk to the media vendors yourself to make it clear that these practices are unacceptable.