ANA / Reed Smith Report Urges Marketers to Demand Transparency from Agencies on Rebates / Incentives Received | About the ANA | ANA

ANA / Reed Smith Report Urges Marketers to Demand Transparency from Agencies on Rebates / Incentives Received

NEW YORK (July 16, 2012) – A new study by ANA (Association of National Advertisers) and Reed Smith reveals that nearly one-third of U.S. marketers are aware of rebates / incentive payments from media companies to agencies that may not be reimbursed to the advertiser.

Through its new white paper Media Rebates / Incentives Require Full Transparency, ANA seeks to help marketers better understand this type of incentive. In support of the white paper, the ANA surveyed nearly 200 client-side marketers to fully explore this topic. The white paper calls for agencies to be transparent about these rebates, and for marketers’ agency contracts to clearly outline the proper handling and return of rebate assets.

According to the ANA / Reed Smith white paper, best practices for advertisers regarding rebates / incentives paid by media companies to agencies include:

  • Agree that the entire benefit of media rebates / incentives belongs to the marketer and that agencies will be completely transparent regarding any rebates / incentives received.
  • Use clear language in agency contracts specifying how rebates will be handled. Contracts should exist at both the agency and holding company level to address “global” advertising arrangements and ensure the fair allocation of rebates / incentives.
  • Consider conducting periodic audits to ensure that unauthorized incentives / rebate activity is not occurring.

“It is imperative that advertisers become more aware of these incentives and take ownership of all assets recouped on their business,” said Bill Duggan, ANA Group Executive Vice President. “The only way to make this a reality is for advertisers and agencies to maintain clear, contractual transparency about rebate and incentive activity.”

The study found that 85 percent of those surveyed believe agencies should remit all rebate dollars to clients, and that 63 percent of respondents believe that agencies who accept rebate dollars from U.S. media cannot be objective with their media allocation recommendations. Only 35 percent indicated that they have clear, specific language in their contract that outlines the incentives and rebates that should be returned to them.

Detailed study findings, as well as suggested contract language regarding rebate ownership and agency auditing, are also included in the white paper. The study was conducted from May to mid-June 2012, with 188 client-side marketers responding to the survey.

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About the ANA

The mission of the ANA (Association of National Advertisers) is to drive growth for marketing professionals, brands and businesses, the industry, and humanity. The ANA serves the marketing needs of 20,000 brands by leveraging the 12-point ANA Growth Agenda, which has been endorsed by the Global CMO Growth Council. The ANA’s membership consists of U.S. and international companies, including client-side marketers, nonprofits, fundraisers, and marketing solutions providers (data science and technology companies, ad agencies, publishers, media companies, suppliers, and vendors). The ANA creates Marketing Growth Champions by serving, educating, and advocating for more than 50,000 industry members that collectively invest more than $400 billion in marketing and advertising annually.

About Reed Smith

Reed Smith is a global law firm with nearly 1,700 lawyers in 23 offices throughout the United States, Europe, Asia and the Middle East, and has represented the advertising, marketing, promotion, and entertainment industries for more than 50 years. The firm’s worldwide presence, together with its membership in the Global Advertising Lawyers Alliance, provides access to an extensive network of counsel throughout the world, allowing clients to obtain the advice they need in locales where they need it. Practice areas include truth-in-advertising, e-commerce, intellectual property, celebrity endorsements, collective bargaining agreements with performing unions, film and television production, distribution and financing, sweepstakes, contests, promotions, event management, sponsorships, ambush marketing, product placement and integration, licensing, labeling, packaging, defamation, invasion of privacy, viral marketing, contracts, mergers and acquisitions and joint ventures. For more information, visit www.reedsmith.com.

 

Press Contacts:

Luna Newton
CooperKatz & Co. for the ANA
lnewton@cooperkatz.com
917.595.3061

Marcus Hardy
CooperKatz & Co. for the ANA
mhardy@cooperkatz.com
917.595.3043

Jamie Moss
newsPRos for Reed Smith
jamie@newspros.com
201.493.1027