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News Plus 15 Feb 2021 - 3 min read

Omnicom investment chief: To solve transparency riddle, read agencies’ ACCC submissions

By Brendan Coyne - Editor

Agencies should not see ACCC report as green light to "make money on the side". Advertisers that care about how their media agency spends their money and takes its cut now have all the evidence they need, suggests OMG Chief Investment Officer, Kristiaan Kroon.

What you need to know:
  • Marketers told by ACCC to do homework and due diligence around media agencies and contractual approaches.
  • OMG investment chief says that should not be used as excuse by agencies to "make money on the side".
  • Kroon urges marketers to read holding group's publicly available inquiry submissions.
  • Claims some are "deafeningly silent" on key areas.

Brands that care about media agency transparency already have access to answers, according to Omnicom Chief Investment Officer Kristiaan Kroon.

He suggests the ‘due diligence’ marketers have been advised to undertake by the ACCC should start with holding groups’ publicly available answers to its questions.

While some consultants have argued most marketers don’t care enough about “ticket clipping” to force change, and that the industry should move on, Kroon and Omnicom see competitive advantage in transparency – and are showing marketers where to look.

'Deafening silence'

All bar one of the big media agency groups have made public their responses to the ACCC’s questions around their practices.

“The ACCC asked questions that covered an enormous number of areas, from opacity to what tech do you own, to rebates, free inventory, incentives. The view we took was they are pretty simple questions to answer and we answered all of them,” said Kroon “That's publicly available.”

Kroon claimed other big agency groups had been less forthcoming.

“One holding group doesn't seem to have answered any of the questions, certainly not publicly. The other holding groups have answered a few of the questions in varying degrees of detail. I would argue that none of them even try to answer the majority of questions, and some, if not all of them, avoided certain sections,” he told Mi3’s latest podcast.

“The ACCC asked some pointy questions. You can go and read what everyone has to say or where they are silent, deafeningly so in some areas. As a client, you should pick it up and see what your level of comfort is around that subject.”

See for yourself

Kroon also suggested the ACCC’s decision not to regulate the market should not be seen as a green light for sharp practices.

“It’s not an excuse for everyone – and I include independent agencies and the new 'holdcos' like S4 and Accenture as well as the holding groups – to then run opaque business models that make money on the side because the ACCC says ‘buyer beware’,” said Kroon.

“It's incumbent on everyone who wants a sustainable, positive industry to lean in and take the conversation forward, not just say, 'it's all on advertisers', because it's not,” he added.

“Advertisers should expect that their advertising agency is doing the right thing for them, adhering to contracts and doing the work that they've been employed to do. The ACCC inquiry shines a light on that – and it’s there for everyone to see.”

Publicis is the only big agency holding group missing from the inquiry’s submissions page.

Publicis Groupe ANZ chief exec, Michael Rebelo, said that is because Publicis fully answered the committee’s questions. He agreed with Kroon that other holding groups did not.

“In our submission, we provided detailed responses to each relevant question, as opposed to generalised responses to some of the questions,” said Rebelo.

“This meant that we included commercially sensitive information, hence requesting to the ACCC that our submission be made confidential.”

You can listen to Kristiaan Kroon, the MFA’s Megan Brownlow, IPG Mediabrands Joshua Lowcock, IAB chief Gai Le Roy and Guardian Australia’s Dan Stinton discuss the ACCC’s findings here via the Mi3 podcast – with part two to follow next week.

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