ANA Releases "Production Transparency in the U.S. Advertising Industry"

August 9, 2017

By Bill Duggan, Group EVP, ANA


ANA

 

Today ANA released "Production Transparency in the U.S. Advertising Industry." This report was literally twelve months in the making, starting when the ANA Production Transparency Task Force was launched in August 2016. The task force had a specific mission: (1) to assess whether there are non-transparent advertising agency practices in the U.S. production industry; and (2) to assess advertiser production management processes and develop recommendations for improvement.

The key finding of the report is that transparency concerns exist at multiple agencies and holding companies. Other important findings:

  • The use of agency in-house production resources is not always transparent to the advertiser. Some agencies use generic and unrelated names to brand their in-house facilities, which can mask that they are owned or affiliated with the agency.
  • Production business processes marked by agency control of the bidding system — where the agency also competes for the business — is sometimes dysfunctional and conflicted because the buyer can also be the seller of the services. This raises concerns that agencies are using their positions to ensure that their bids have the potential to appear superior to those from independent companies.
  • Non-transparent agency-controlled bidding can lead to costly, inefficient, and sub-optimal advertiser business decisions. The financial impact to marketers can be significant. 
  • Where non-transparent practices exist, the production and editing competitive landscape becomes potentially compromised and unreliable. Such situations may jeopardize the health and well-being of competitors in the production and editing ecosystem. 

As was the case last year when the ANA media transparency report was issued from K2 Intelligence, advertisers first need to be aware of these production transparency issues. Advertisers are strongly advised to read the full report and have conversations with their agencies. Then, advertisers are encouraged to take action and the report provides ten specific recommendations for that.


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