ISBA has published a framework contract for members to use in their negotiations with media agencies – without consulting the IPA, which represents agencies.
When ISBA updated its framework contract for creative agencies last year, it collaborated with the IPA. But it evidently feels differently about media shops.
Debbie Morrison, ISBA’s director of consultancy and best practice, has ratcheted up the rhetoric by saying media agencies don’t have "the best interests of their clients at heart any more" – comments that have angered agency chiefs and even dismayed some ISBA members.
For ISBA to complain about trust being undermined by agencies at the same time as it undermines agencies without consulting them is an irony that has been lost on the trade body in its quest for publicity.
But that should not distract us from asking: why has trust in agencies fallen and what should be done about it?
ISBA says it reviewed its framework contract because the digital media landscape has become more complex. It also cited the growing trend for agencies to get rebates and free inventory from media owners and urged advertisers to demand more control over customer data. These are good reasons to look at tightening up the contract, especially as ISBA last reviewed it a decade ago.
However, ISBA’s concern is not just about complexity. It is worried about the increasing power of the big agency groups and appears to find it maddening that they have increased their profits while clients struggle to grow theirs.
The paradox is that this situation is partly of advertisers’ own making.
Agencies have scaled up to get better prices for their clients from media owners. They have also had to seek new – and sometimes less transparent – ways to make money as advertisers have squeezed agency margins.
The result is that trust keeps falling and advertisers have turned to an army of third parties – procurement specialists, auditors and media consultancies – to check their agency deals. Indeed, ISBA used some of these businesses to draw up its framework contract.
Doubtless they offer impartial advice. But one well-placed observer who does not work at a media agency asks if some of these companies are stoking fears about agencies because it could be good for their own business.
Client/agency relationships don’t have to be this way. Smart advertisers have always known they need to keep a close eye on their agencies. But they also regard them as partners, not adversaries. That requires dialogue. ISBA, take note.