Advertising Age reported advertiser concern over transparency with media agencies is still bad—a decade after the ANA published a report alleging shady and unethical practices in the field.
The global issue is especially significant given holding companies—including single White operating company WPP—are transforming into media-first enterprises with an imperative on generating revenue and profits. Sorry, but desperation for dollars leads to greed, scheming, and improprieties.
Expect advertising executives to elevate their notorious ranking on the list of least-trusted professions.
Media agency concerns persist, and are more complex for advertisers, 10 years after transparency investigation
By Ewan Larkin
A decade after the Association of National Advertisers published a report prepared by investigative firm K2 alleging that media agencies were collecting undisclosed cash rebates from media deals, advertiser concerns about agency transparency have barely changed—and the problem, according to the ANA, has only grown more complex.
An ANA survey of 108 member companies released today found 43% of advertisers have concerns about the level of transparency with their media agencies, down only slightly from the 46% who said the same in 2014, two years before the K2 report was published. Among those with concerns, 49% say the situation has gotten worse over the past year, up from 42% in 2014, with principal media—where media agencies buy media and resell it to clients—cited as the primary driver.
That marginal gain came as a disappointment to Bill Duggan, group executive VP at the ANA, who told Ad Age that the nation’s largest marketing industry trade group had been “absolutely hoping for more progress.”
“The elephant in the room, has enough changed in the last 10 years? No, I don’t think so,” said Duggan.
Progress has been halted, experts said, by the rapid growth of the media channels least amenable to scrutiny. Social media, digital, retail media and walled-garden platforms have surged in the decade since the K2 report, and with them the ad tech infrastructure that makes it harder to follow where money goes.
“The media that are in ascendancy now are the ones which are inherently less transparent,” said Nick Manning, a former Ebiquity executive who worked on the 2016 K2 report. “When you get ad tech involvement, you get a loss of transparency.”
Duggan acknowledged the original K2 report didn’t pay enough attention to principal media, which has become a significant and growing source of revenue for holding companies. Court filings made public earlier this year from an ongoing legal dispute between WPP and former GroupM executive Richard Foster illustrated the scale: a report prepared by Foster in December 2024 stated WPP generated roughly $1 billion annually from rebates and principal-based media buying combined, with principal media accounting for $713 million of that figure.
Principal media has grown even as marketers remain uncertain about it. A separate ANA study published earlier this year found that 90% of marketers who used principal media weren’t sure the recommended media was in their best interest, up from 79% the prior year. Many accept the practice as a trade-off for lower fees, with little visibility into actual margins and few contractual caps—a problem compounded by procurement teams, rather than media specialists, often handling these deals.
Marketers need to reckon with how fundamentally the agency role has changed, experts said.
“It continues to surprise me how the industry tolerates things which, outside of the media buying ecosystem, would be clearly anathema,” said Richard Plansky, who led the K2 investigation and now works at Kroll, a global financial and risk advisory firm. The same practices applied to an investment advisor relationship, for example, would cause public outrage, he said.
The positives—and room for improvement
The ANA’s latest survey found that 56% of member companies had updated their media agency contracts within the past year, and 70% within the past two years, figures Duggan called encouraging. Those updates, however, have not consistently addressed the most critical issues. Only 54% of contracts specifically cover rebates, and 61% address principal media, according to the ANA’s findings.
“It’s a little disappointing to me that more marketers have not updated their contracts to address these issues,” Duggan said.
The ANA has tried to make it easy, he added. The organization’s outside counsel, Reed Smith, has published contract templates specifically designed to address both issues, with the most recent update focused on principal media.
Many marketers lack the specialized knowledge to know what their agency agreements should cover, often relying on standard supplier contracts rather than bespoke agency agreements, said Keri Bruce, partner at Reed Smith. Even where stronger contracts exist, she said, marketers frequently fail to act on them.
“You have to make sure that you’re ... operationalizing your contract,” Bruce said, pointing to audit rights as an example.
“It’s your money, Mr. Marketer, you have to manage it,” Duggan said, recommending that companies spending $50 million or more on media appoint a dedicated internal media lead. “Media is just too fragmented, complicated, changes every minute; you can’t just bundle it into another responsibility that the CMO has.”
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