Short-changed. Again.

Short-changed. Again.

At best, clients can only make an informed guess as to the true scale of agency mischief, writes Bob Wootton

You might imagine I’d have a view on the two most significant stories of the day.

First up, reports from the US that some advertisers and agencies are reaching secret settlements following last year’s ANA report on transparency.

I’m not going to come over all moral and judgemental here. Rather, I agree with most of the commentators I respect (like MediaSense’s Graham Brown) that this is a pragmatic solution to a thorny problem.

Wherever large sums of money are at stake, litigation looms in the shadows. Especially in the US, known for having the highest number of lawyers per capita.

Despite agencies’ and holding groups’ very public dismissal of the ANA report, it now appears that some have acted, either reactively or proactively.

Industry gossip puts agencies in different camps but the facts can’t be checked because such settlements are intrinsically both extremely sensitive and highly confidential.

But consider a hypothetical client, probably a member of the ANA and perhaps close to the workings that led to ebiquity’s and K2 Intelligence’s investigation.

Spurred by the report, it raises the matter with its agency and is met with vigorous denial of the kind we’ve all now seen in the press.

The advertiser persists and, crucially, escalates. There’s further dissembling and probably a good slathering of plausible deniability predicated upon the ‘distance’ between the agency and its holding company’s trading arm.

This is the US after all – admit to nothing until proven and then only the minimum.

Eventually the agency realises that their client is not going to let it go and is prepared to fire them or go legal, where disclosure will probably surface all manner of ‘interesting’ behaviour.

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It exercises the agility for which such businesses are rightly admired, pragmatically seeking to mitigate. A prior ‘out of court’ settlement, probably for serious money in compensation for prior misdemeanours, is reached.

Yet at best, the client can only make an informed guess as to the true scale of mischief. Only the agency knows for sure. So my guess is that most clients will therefore have been short-changed. Again.

But compensation has been extracted and face has been saved.

If they’re significant enough, we may be able to glimpse some aggregated write-downs as extraordinary costs (which they most certainly are) in agencies’ future financials. But for some top-flight accounting conjuring, of course.

Such settlements must necessarily be retrospective. I do hope that the clients in question have not been induced to waive their rights to future investigations in the wrap-up, because if they have, they will be fair game again in future.

Doubtless there will be similar conversations on other territories – like the UK. Bring it on.

If the past few years have taught us anything, it is that losses have to be recouped and income scraped from somewhere.

Bravo Mr. Pritchard

No point in rehashing all the comment spawned by P&G’s global CMO Marc Pritchard’s speech to the US IAB in Florida (nice there at this time of year).

Eminent marketing academic Mark Ritson called it “the most important speech in marketing for twenty years” but nothing I’ve seen contextualises how the speech manifests and reverberates at industry level.

Trade bodies are always accused of stirring things up to justify their existence. This is sometimes a fair cop, though in truth few are resourced to be so reckless. But whatever, they exist to represent the collective interests of their members.

Commercial confidentiality and competition law tie one hand behind their backs and they are in truth fairly easily rebuffed at first, which is why persistence and iteration are necessary.

Things get interesting when one or more of their members – who spend real money – is prepared to speak up and give them something to get both behind and in front of.

That’s what’s happened here. Advertiser bodies like WFA, ANA, ISBA and their counterparts around the world are now empowered and have the licence and mandate to pursue better outcomes for their members.

By happy coincidence, they’ll all be together at the WFA’s Global Marketer Week at the end of April, this year in Toronto (another nice place at that time of year).

Many in agencies abhor the very behaviours these two issues speak to, but as employees must toe the company line. When the chips are down it pays their wages. True to form, IDComms have just released the results of an interesting survey in this space.

An encouraging by-product

One silver lining emerging is the expectation – at last! – of greater transparency and accountability from online media, where billions of ad dollars have been, er, ‘going missing’.

Now rightly under siege from other media which have long submitted themselves to much tighter joint industry-controlled rigours, even the mighty Google and Facebook have announced that they will open up to the US Media Ratings Council.

We must drive for the same here. We have excellent tools – UKOM and JICWEBS – which will benefit from the boost to their saliency, standing and credibility. And the other JIC’s – notably BARB and PAMCO – will have key roles to play too.

We could at last see online traded with credible, parity metrics. One can only wonder how that might affect advertisers’ budget deployment…

…and another thing

Many more production companies have joined the spat with creative agencies.

I confess I’m with them. I can’t see how an agency with a vested interest in getting the job for its own in-house facility can run a competitive pitch that is in any way fair to outside parties. Sounds like a fishing trip.

Even worse when an agency ‘asks’ those outside parties to pitch high so its own offering looks more attractive, as is alleged in (more) legal proceedings in the US.

However, the issue is wider and speaks once again to advertiser leadership. Because advertisers are increasingly in danger of running similarly lopsided pitches themselves, for example in the programmatic space…

Bob Wootton is the principal of Deconstruction

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