US investigates trading practices

The UK media industry is facing a potentially "game-changing" assault after a US trade body launched a probe into agencies' trading practices, industry leaders said.

Wootton: said the probe could ‘change the game for all of us’
Wootton: said the probe could ‘change the game for all of us’

The Association of National Advertisers in the US has hired K2 Intelligence and the auditing company Ebiquity to examine "media transparency issues, including rebates" – the practice of agencies receiving payments from media owners – and to "demystify the landscape".

K2 Intelligence is led by former staff of the investi­gation group Kroll.

One British media owner said "everyone’s too frightened" to challenge the role of media agencies, describing it as "a consolidation of power in too few hands to do the deals they do with questionable transparency".

Bob Wootton, the director of media and advertising at ISBA, which represents many of the same advertisers as the ANA, welcomed the move: "It’s pretty obvious that the ANA and their members believe there’s something going on there and it needs surfacing. And, if they find something, it’s going to change the game [in America]. The fact is these agencies are posting margins more than their clients are paying them."

ISBA is "watching very closely" but has no plans for a UK investigation.

Wootton added the ANA could "change the game for all of us – without us having to do anything" despite differences between the US and European advertising markets.