NEW YORK: The Federal Bureau of Investigation (FBI) is reportedly looking into media trading practices in the US advertising industry amid concerns about a lack of transparency.
Campaign first reported the news last Thursday, citing “multiple” but unidentified sources who are said to have revealed that the law enforcement agency has been contacting people with knowledge of the ad industry in recent months and asking for their help.
The FBI has a long-standing policy of not commenting on the existence of any investigation, making the Campaign report rather short on detail, but one of the sources suggested the FBI is taking an interest in certain companies and the role of some of their senior executives.
It is also reported that this particular FBI probe is separate from an investigation that the Department of Justice (DoJ) launched at the end of 2016 into alleged bid-rigging by agencies in the US advertising production sector. All agencies denied any wrongdoing at the time.
Returning to the latest probe, Campaign reported that there has been speculation that the DoJ might launch an investigation after the Association of National Advertisers (ANA) published the results of its own inquiry into trading practices at media agencies.
Released last year, the ANA report concluded that “transparency concerns exist at multiple agencies and holding companies”.
The report included a range of allegations, among them that some agencies had nudged production and post-production contracts toward their in-house production arms, made possible by the agencies’ control of the bidding system.
Also, that the use of agency in-house production was not always transparent to the advertiser, leading to cost inefficiencies and “a disrupted competitive landscape”.
Campaign first reported the news last Thursday, citing “multiple” but unidentified sources who are said to have revealed that the law enforcement agency has been contacting people with knowledge of the ad industry in recent months and asking for their help.
The FBI has a long-standing policy of not commenting on the existence of any investigation, making the Campaign report rather short on detail, but one of the sources suggested the FBI is taking an interest in certain companies and the role of some of their senior executives.
It is also reported that this particular FBI probe is separate from an investigation that the Department of Justice (DoJ) launched at the end of 2016 into alleged bid-rigging by agencies in the US advertising production sector. All agencies denied any wrongdoing at the time.
Returning to the latest probe, Campaign reported that there has been speculation that the DoJ might launch an investigation after the Association of National Advertisers (ANA) published the results of its own inquiry into trading practices at media agencies.
Released last year, the ANA report concluded that “transparency concerns exist at multiple agencies and holding companies”.
The report included a range of allegations, among them that some agencies had nudged production and post-production contracts toward their in-house production arms, made possible by the agencies’ control of the bidding system.
Also, that the use of agency in-house production was not always transparent to the advertiser, leading to cost inefficiencies and “a disrupted competitive landscape”.
Sourced from Campaign, ANA; additional content by WARC staff
