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Advertisers demand agency clarity

News, 29 April 2016

LONDON: Many of the UK's top advertisers have been sent a standard contract by the Incorporated Society of British Advertisers (ISBA), which aims to protect the interests of brands when they negotiate with media agencies.

The trade body, whose 450 members include heavyweight advertisers such as Coca-Cola and Unilever, took the rare move following growing concern about how agencies manage their media budgets, the Financial Times reported.

A key concern, both in the UK and in the US, centres on whether agencies have been fully transparent in their dealings, and there is suspicion that undisclosed "rebates" from media companies have not been passed back to clients.

"We're at a tipping point, we've got to do something," said Debbie Morrison, a director at ISBA. "I don't believe that [the media agencies] have got the best interests of their clients at heart anymore."

ISBA's 51-page contract is designed to give advertisers greater transparency about how their media budgets are spent and it contains a number of controversial clauses that are likely to spark resistance.

Foremost among these is a clause allowing advertisers the legal right to send in an auditor to assess not just the chosen agency but also its holding company.

ISBA members have been told that obtaining and enforcing wide-ranging audit rights are required to make sure that the agency acts in their best interests, although they are under no obligation to do so.

However, Paul Bainsfair, the director-general of the Institute of Practitioners in Advertising, has responded firmly already.

He said that he had not yet read the ISBA contract and could not comment on its content, but noted: "Since the contract has been developed by ISBA for advertisers and solely from their perspective, it is highly likely that it will not be even-handed.

"If this is the case we will not be recommending that IPA member agencies agree to use it."

Data sourced from Financial Times; additional content by Warc staff