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<ul><li>The Out-of-home industry has been severely impacted by the pandemic with the months of April, May and June seeing almost zero business.</li><li>However, with the country slowly opening up, things are starting to move and a lot of hope also rests on the festive season.</li><li>We talk to experts who tell us what the rest of the year looks like and why this is a good time for advertisers to start spending on OOH.</li></ul>The lockdown impacted most industries across the globe. However, one industry that had to bear the maximum brunt in the advertising world was the Out-of-home (OOH) segment. Considering people were stuck at their homes, OOH advertising had come to a complete standstill. The people who ventured out were greeted with empty hoardings, or hoardings that spoke about the coronavirus and the precautions one can take to prevent it from spreading.<br /><br /> However, with the festive season round the corner, is there a chance of some growth coming back to OOH? <br /><br /> Experts feel there are a lot of factors that will impact the growth. It is a fact that the number of Covid-19 cases are still on the rise in the country. So how the festive season turns out to be will also be dependent on where we stand in terms of the pandemic in the next month. Consumer sentiments will turn once things start getting better and they feel the confidence of going out again.<br /><br /> However, since the industry saw almost a washout during the weeks of the strict lockdown, even if the festive season is around 40-50% of what it is every year, we are still some time away from things getting back to normal.<br /><br /> According to a recent report by Pitch-Madison, overall, OOH advertising in India declined by 55% in the first half of the year and closed at Rs 760 crore. ‘On account of this, OOH’s share of total AdEx, which has always been above 5%, has come down to 4% in H1’20,’ stated the report.<br /><br /> <b>The story so far</b><br /><br /> Owing to people being stuck at home, sectors like OOH and experiential were impacted badly. People weren’t going out, so there was no point in advertising. <br /><br /> “The months between April to June were a complete washout for the OOH business. However, with the festive season ahead of us, we are having conversations with advertisers. When it comes to the festive season, the most important thing is the positioning of the dates. Luckily this year, Mahalaya (Day 0 of Durge Puja) is happening at the end of September, which is a full month before the Puja actually starts. So that gives us some breathing space,” said <keyword id="939652" type="PERSON" weightage="20" keywordseo="Noomi-Mehta">Noomi Mehta</keyword>, Chairman and MD, <keyword id="3910022" type="COMPANY" weightage="20" keywordseo="selvel">Selvel</keyword> One.<br /><br /> He shares that compared to last year, Selvel might see revival of anywhere between 25-40% during the festive weeks. “Even a 25-40% revival is a big deal because we have been at 0,” he added.<br /><br /> He said that the fact that a lot of campaigns have been pending for the past 6 months will ensure that advertisers slowly start launching them. <br /><br /> For <keyword id="2015316" type="PERSON" weightage="20" keywordseo="Times-OOH">Times OOH</keyword>, that has a strong presence in transit media (one of the worst impacted segments), recovery has been slow. While airports have opened up, the footfall is still only picking up, advertisers are still wary. <br /><br /> “While a lot of advertisers are coming back slowly because brands advertising at airports are long-term advertisers, a lot of them have been asking for discounts and price reductions due to low traffic,” shared <keyword id="6814809" type="UNKNOWN" weightage="20" keywordseo="Aman-Nanda">Aman Nanda</keyword>, Chief Strategy Officer, Times OOH.<br /><br /> If traffic is down by 70%, brands are looking for a 70% cut on the rate-card. “And that has been one of the major challenges for us,” added Nanda.<br /><br /> However, according to <keyword id="2967121" type="PERSON" weightage="20" keywordseo="Dipankar-Sanyal">Dipankar Sanyal</keyword>, CEO, Platinum OOH, things are slowly starting to move in the right direction. “As the unlocking is happening in phases, more and more people can now be seen on the streets across cities in India. The mobility reports also shows that we are 60% of pre-Covid levels of people on all roads. The number of advertisers in OOH is also increasing,” he said.<br /><br /> <b>A few facts</b><br /><br /> While <keyword id="6366797" type="COMPANY" weightage="20" keywordseo="Delhi-Metro">Delhi Metro</keyword> started operating from this week, airports have been open for a while now. The Delhi Metro ferried around 15,000 on Day 1 and on Day 2, the number had swelled to 8000 people taking the yellow line in the morning.<br /><br /> Last week civil aviation minister Hardeep Puri said that as the centre had allowed flight capacities to be increased to 60%, domestic flight operations were picking up. As of September 6, total number of footfall at airports has been 2,85,577 (data from the Ministry of Civil Aviation).<br /><br /> With this, the overall confidence of passengers as well as advertisers is growing steadily. A recent GVK-led'Restart Feedback’ Survey for Mumbai Airport reveals that 99.6% passengers find air travel to be the most reliable mode of transport. Moreover, 54.7% passengers are flying primarily for business purposes. The Survey displays a change in the purpose of travel for passengers, with business travel gaining momentum at the Mumbai airport. With airport safety measures, passengers are ready to fly even twice a month. Passenger satisfaction with the safety measures at the airport inspires confidence to travel by air more than once a month.<br /><br /> <b>Wooing advertisers back to OOH</b><br /><br /> Over the past few months, hoardings across most cities have either been empty, or being carrying coronavirus advisory. However, with unlock being done across the country, people are coming out and this is a good time to grab people’s eyeballs.<br /><br /> So how is it that OOH media owners and agencies are talking to advertisers about the importance of OOH and bringing them back to the medium? “At <keyword id="2712628" type="PERSON" weightage="20" keywordseo="Posterscope">Posterscope</keyword>, we have always maintained that OOH is a powerful medium that adds value to any communication plan. The recent study done by Posterscope along with its partners establish strong indicators that OOH adds a significant boost to campaigns when used in the right context and with relevant content. While many of our advertisers have seen the value of this others are beginning to warm up to this fact as well,” shared <keyword id="3151002" type="PERSON" weightage="20" keywordseo="Fabian-Cowan">Fabian Cowan</keyword>, Country Head, Posterscope India.<br /><br /> On how OOH plays an important role in delivering high-impact messages, <keyword id="207494" type="PERSON" weightage="20" keywordseo="Amarjeet-Singh">Amarjeet Singh</keyword>, Chief Operating Officer, Laqshya Solutions said, “OOH propels the concept of Zero Touch media for the viewers and with traffic back on road, it is gaining the preference with each passing day. Strategic planning enables OOH to deliver the message and create an impact which is remembered for a long time. Good creatives with a strong OOH-cum-digital plan willhave great outcomes. In most cities, traffic is at least 70% of normal, while in cities like Delhi, it is estimated to be at 88%, based on telecom data.<br /><br /> In the present circumstances hyper-local content has garnered great importance. OOH is best suited for hyper-local content. OOH as a medium allows the advertiser brand to customize campaigns locally to deliver messages relevant to that area.”<br /><br /> Having said that, Mehta expressed his disappointment at brands not doing enough on OOH in the month of August. “Brands have lost a great opportunity to really drive a message home in the month of July and August when traffic was gradually increasing on Indian roads. This was the time when brands would have got the space at really low rates and would have got a great spread across the city. Even if it would have reached half the normal number of people, they would get double the bang for their bucks because there nobody else was advertising despite people being out and about. It had the potential of giving their communication a massive recall value, at a much lower cost.”<br /><br /> Agreeing, Nanda said that this could have been a time when brands came up with campaigns to build a stronger connect with their consumers. “We have written several papers on how during a slowdown consumers look for some reinforcement and reassurance from brands. And communications like this helps them in brand building. Moreover, everybody knows that OOH is the nearest to the point of sale. You can really pin point which markets and cities are open. So if you really plan your campaigns well, OOH works very well in doing targeted campaigns to help sale of your products in particular areas,” explained Nanda.<br /><br /> <b>What the industry is doing as a whole to minimize the impact?</b><br /><br /> Considering the impact on the medium so far, there will need to be a proper recovery plan in place. However, is the OOH industry as a whole doing something to minimize the impact?<br /><br /> Sanyal said, “It goes without saying that the industry is doing everything possible across board to make sure advertisers are back in our media. I see the level of engagement that is happening at every level is very reassuring. So if you look at traditional media it was initially wooing through sweetened deals followed by hard to data to give reassurance to the advertisers of the increasing footfalls. In activation which is worst hit sector in outdoor has been doing stores on wheels and RWA engagements. The emergence of e-meeting platforms and CSR activities like distribution of face masks, sanitisers etc have kept the industry busy in the event sector. In retail we have seen how the signage game is changing with the new Covid norms of social distancing, sanitisation and minimal contact while transacting.DOOH is slowly gaining prominence as the malls and airports come back to life. So every section of OOH industry is adapting to the new norms and coming up with solutions for the advertisers.”<br /><br /> “ The industry is indeed fighting back with several strategies including focus on Tier 2/3 markets, package rates (city specific as well as multi cities), use of Audience Measurement Tools (Laqsha Media has the most advanced metric platform in India) and of course some degree of price rationalization. The recent licensee fee waiver by various Corporations &amp; government bodies has greatly helped OOH owners to offer discounts. Agencies are also working on giving better ROI to clients for their OOH campaigns,” shared Singh.<br /><br /> On what his advice for brands is, Mehta said, “I would ask them to take off their blinders. OOH combined with a bit of social media has the potential to make your brand viral. Brands should use this opportunity.” <br />

Why this is a good time for advertisers to start spending on OOH

<ul><li>In this new year, we want to crystal gaze into what the year has in store for the industry.</li><li>In today's feature, we talk to experts from the out-of-home industry who give us a sense of what one should expect from the <keyword id="2014281" type="ORGANIZATION" weightage="20" keywordseo="OOH">OOH</keyword> industry in 2021.</li></ul>The Covid-19 induced lockdown last year hit the out-of-home industry hard. With people not venturing out for weeks, billboards across the country were left empty. April, May and June almost witnessed zero business. <br /><br /> However, as the country started opening up, advertisers started coming back to the medium, slowly but steadily. <br /><br /> The festive season, while holding a lot of expectations, did not see the kind of enthusiasm from advertisers as was expected. Everyone was in the ‘let’s-wait-and-watch’ phase, with brands being cautious of spending too much on advertising.<br /><br /> However, now despite the virus still being around, people are out and about. And with vaccines soon expected to hit the markets, things will only look up from here. And with increasing mobility with each passing day, one can only hope for things to keep improving. While we might still be some time away from a complete recovery, the process has already started.<br /><br /> Segments like OTT, real estate and FMCG have always been big spenders on the medium and with people slowly resuming travel, more and more advertisers are coming back too. <br /><br /> It is also expected that 2021 could finally see the boost that Digital OOH has been waiting for in India. We reached out to experts from the OOH ecosystem to understand their expectations from 2021 and here’ s what they had to say.<br /><br /> <b><keyword id="939652" type="PERSON" weightage="20" keywordseo="Noomi-Mehta">Noomi Mehta</keyword>, Chairman &amp; MD, <keyword id="3910022" type="COMPANY" weightage="20" keywordseo="selvel">Selvel</keyword> One</b><br /><br />  <div type="image" title="Noomi-Mehta" msid="80170862" hostid="261"></div><br /> 2021 will be a defining year because the classic form of OOH will not rebound to the extent that we hope it to. I don’t think the normal hoardings across the country are going to be filled, they won’t get the level of occupancy we are looking for. The shift towards digital is extremely clear to me now. Clients are moving their monies to digital not because of any particular reason but because it is one medium that gives them the most accountability where it is possible to measure and trace the actual performance vis-à-vis the money spent. The same is going to happen to outdoor, which is why the recent initiatives we’re taking, to establish a common currency of measurement, is going to be of paramount importance as we move ahead and will lead the way forward. If we’re able to achieve this by the second half of the year, outdoor as a medium will take off definitely. <br /><br /> <b><keyword id="2406965" type="PERSON" weightage="20" keywordseo="Atul-Shrivastava">Atul Shrivastava</keyword>, CEO, <keyword id="2911687" type="PERSON" weightage="20" keywordseo="Laqshya-Media-Group">Laqshya Media Group</keyword></b><br /><br />   <div type="image" title="Atul Shrivastava - Group CEO - Laqshya Media Group" msid="80170929" hostid="261"></div><br />The OTT platforms have seen a huge spike in users over the last several months. As the pandemic is slowing down in India, these platforms will invest in both content and the advertising of the content to keep the growth rates up. As per the available data, the unprecedented rise in subscribers in the first half of the year is gradually slowing down. With 60-70% growth witnessed around May, figures for monthly subscriber rise have now reached around 20%. The subscription war is imminent and the platforms must use smart advertising to make their respective brands stronger.<br /><br /> The unique suitability of OOH to the digital platforms business has received a lot of business and academic attention – and we expect a lot of the ‘conventional' brands to learn from the experience of OTT platforms. It is because of this compatibility between OTT and OOH that we dominated the promotion of shows on OTT Platforms over the last couple of years. Post the lockdown, OOH came back with a bang. Most visible campaigns were launched by ZEE5 and a few others. Important to note is that India's homegrown platforms, too, have emerged as strong players in OTT category and as leaders in the smart use of OOH media.<br /><br /> As per the recent WARC Report, OOH is globally forecast to be the second-fastest growing medium in 2021, with ad spend rising by a fifth (20.2%). We expect this rally to happen in India as well.<br /><br /> <b><keyword id="6814809" type="UNKNOWN" weightage="20" keywordseo="Aman-Nanda">Aman Nanda</keyword>, Chief Strategy Officer, <keyword id="2015316" type="PERSON" weightage="20" keywordseo="Times-OOH">Times OOH</keyword></b><br /><br />  <div type="image" title="Aman Nanda" msid="80171052" hostid="261"></div><br /> The year 2020 has reaffirmed our faith in the power and impact of OOH media to drive audience sentiment at scale. New categories such as OTT entertainment, online education and hygiene products emerged as the biggest spenders, and OOH spends have shifted from business districts to residential areas, as people are spending more time around their own neighborhoods. The pandemic has also sprung fledgeling remote client relationships, and our team has adapted to remotely working to deliver the best OOH solutions to our esteemed clients across India.<br /><br /> <b>Ajay Mehta, Founder and MD, Interactive Television (iTV) and MD, Kinetic India</b><br /><br />  <div type="image" title="Ajay Mehta, Managing Director of Cinema (ITV) and OOH (Kinetic)" msid="80171113" hostid="261"></div><br /> 2021 will be a watershed year for the OOH Industry. From the lows experienced by the industry amidst the lockdown, the industry will start rising aggressively and will clock an extremely high growth rate. This will be on the back of multiple factors including normalising of people <keyword id="1058872" type="UNKNOWN" weightage="20" keywordseo="out-of-home">out of home</keyword>, to new touchpoints to demand from OOH heavy categories like Auto and OOH.<br /><br /> While people interpret the Out of Home Industry as a medium that lacks data points and measurement, the fact is that some of us from the Industry have used the time during the pandemic to create several tools and initiatives which use multiple data points to enable advertisers to plan, execute and measure their investments based on deep insights. 2020 has just been the start of this and I see this trend sustaining and gaining traction in 2021. This year will also see new touchpoints coming into the limelight and programmatic and Digital Out of Home will drive this.<br /><br /> Lastly OOH is an impact medium and to achieve the same, we see advertisers demanding more innovative solutions to achieve the same.<br /><br /> <b>Fabian Trevor Cowan, Country Head, Posterscope India<br /></b><br />  <div type="image" title="Fabian Cowan Picture" msid="80171199" hostid="261"></div><br /> <i>Every season has its lipstick trend and just because your perfect color is a pinky beige, that doesn’t mean you can’t wear deep burgundy</i> - <strong>Bobby Brown<br /></strong><br /> This quote pretty much supports my take on the OOH trends for 2021. For the last 230 plus years of its supposed official existence, the OOH medium has witnessed many trends but has always maintained and reinforced its core survival traits of high visibility, high impact and high contextual capabilities. This will continue to be its core growth areas in the future as well.<br /><br /> 5 trends that will only help reinforce these attributes will be ‘increased bandwidth speeds’ on the back of the 5G possibility, which will aid DOOH solutions. Usage and inclusions of ‘Diversified data-sets’ will become the norm rather than an exception in planning for OOH. ‘Automated’ platforms’ will be the natural progression for DOOH networks. ‘Tech collaborations’ will come to the fore to enhance the DOOH solutions, making them more realistic and impactful and lastly ‘OOH with a purpose’ will be the underlying premise for all brand communications in 2021 given that a post-pandemic world will seek more meaningful communications from brands.<br />

OOH: What 2021 has in store for the outdoor industry

<ul><li><keyword id="10032656" type="COMPANY" weightage="20" keywordseo="dentsu-international">dentsu International</keyword> is undergoing a massive global restructuring and will cut down around 6,000 jobs globally in the next two years.</li><li>It will also consolidate it's 160+ global brands to six global leadership brands.</li><li>We talk to <keyword id="7491447" type="PERSON" weightage="20" keywordseo="Anand-Bhadkamkar">Anand Bhadkamkar</keyword>, CEO, India, dentsu, who tells us the impact this global consolidation will have on its India business.</li></ul>Japanese advertising network dentsu International is undergoing a massive global restructuring. The company announced last week that as a part of its accelerated restructuring plans, it will cut down around 12.5% or roughly 6,000 jobs globally.<br /><br />In an official statement, a dentsu spokesperson said, “Consumer intelligence is at the heart of everything we do at dentsu international. We believe integrating our business around the consumer is the greatest advantage we can give our clients and the greatest competitive advantage we can give ourselves. We will do this by accelerating the transformation journey we started last year to simplify further how we operate, delivering even greater agility through a focused portfolio of six global leadership brands with prioritized investment and resources in capabilities of high client demand and growth. <br /><br />“In our H1 2020 financial results, we announced a comprehensive review of our business. As we work through this process, we will take the critical and necessary steps, that many other companies are, to address the impacts the global pandemic has had on our business and ensure we work closely with our people and our clients as we move through this period of accelerated transformation.”<br /><br />As a part of the restructuring, denstu will consolidate its 160+ brands into 6 consolidated leadership brands - Carat, <keyword id="4814486" type="COMPANY" weightage="20" keywordseo="Merkle">Merkle</keyword>, dentsu X, <keyword id="4120995" type="COMPANY" weightage="20" keywordseo="iProspect">iProspect</keyword>, dentsumcgarrybowen, and Isobar.<br /><br />Closer home, dentsu India Network currently has around 3,200 employees under its 20 agencies. In a recent conversation with Anand Bhadkamkar, CEO, India, dentsu, we tried to understand what the global restructuring will mean for dentsu in India, and whether employees in India need to worry about the proposed jobcuts.<br /><br />Excerpts:<br /><br /><strong>Q) Dentsu has announced a massive restructuring globally, which will also include around 6000 job cuts. What kind of impact will this have on dentsu India?</strong><br /><br />Globally, we are reorganizing our businesses under three service lines – Creative, Media and Customer Experience Management. Currently, on a global level, we have around 160 brands that are a part of the organization and dentsu is planning to bring that down to six global brands by the end of 2022. In India, along with the 6 brands, Carat, Merkle, dentsu X, iProspect, dentsumcgarrybowen, and Isobar, we will have Posterscope as an additional brand because OOH has been our strength over the last few years.<br /><br />Currently, almost 45% of our revenue is coming from Digital. While the pandemic affected OOH and Experiential really badly, things should start to come back to normal soon.<br /><br />The global restructuring is more about centralization of capabilities across service lines and we aim to achieve this over the next 2 years. The idea is to ultimately stand true to our One Dentsu strategy. Our focus will be on bringing the best of our services and capabilities to our clients and providing those specializations without any hassles.<br /><br />In India, increasingly we will invest in the high growth areas. We are quite strong on digital, be it performance, customer experience, social media or digital transformation journeys for our clients. We will continue investing in those areas. And as part of our overall business process, the underperforming teams or staff will be re-oriented.<br /><br /><strong>Q) So how concerned do your employees in India need to be, considering there are plans of job cuts globally?</strong><br /><br />Globally they need to restructure 160 brands to 6. In India, things won’t be as drastic because we have already started our consolidation journey. All our businesses are working closely, based on our One Dentsu strategy. It is more about re-investing in the high-growth areas. <br /><strong><br />Q) There is a talk that globally Dentsu will aim to reduce its focus on the traditional creative and media agencies and focus more on the data-focused businesses. Will the organization go a similar route in India too?</strong><br /><br />It is not about reducing focus on traditional creative or media versus data focused businesses, but working with the clients on solving their business problems. The focus is on partnering with clients to help them gain competitive advantage in the market. As a network, we are ideas-led, tech-enabled and data-driven, and that is at the core of everything Dentsu does. So, ideas will always remain at the center of whatever we do. The solution can be either through creative, digital or personalized experience, based on the client problem we need to solve. So overall our focus remains unchanged. However, the current year has led to a lot of changes. Consumer behavior has undergone a lot of change, adoption of digital has fast tracked which is resulting in the entire value-chain moving to digital platforms or e-commerce. So our focus and investments will be on coming up with the best solutions for our clients on their digital transformation journeys. A lot of our investments will go to Adtech, Martech, content creation, providing personalized solutions and experiences will be critical for us.<br /><br /><strong>Q) We’re almost at the end of 2020. As a leader, what will your key focus areas be in 2021?</strong><br /><br />2020 has been a challenging year, not just from a business but from a societal perspective. As an industry, we are seeing a de-growth of around 16-18%. So that has had an obvious impact on our business as we saw spends come down.<br /><br />However, we started seeing recovery from Q3, during IPL and the festive period. The last quarter has been even better than we anticipated. Some of our agencies have also recovered much faster. And, our digital businesses have been doing well. So while overall the year has been muted, we have seen much faster recovery.<br /><br />For 2021, our focus will remain on the high-growth areas – digital, providing relevant data driven solutions for clients and creating relevant experiences for consumers with investments in ad-tech, martech. We will also focus on e-commerce which we've been working on extensively with a lot of our clients across brands. Last year, there was also a lot of focus on voice, video and vernacular, and that will continue to remain a key focus area because it became even more relevant in this pandemic year. We are also seeing gradual recovery of OOH so we will also focus on Digital OOH next year. <br />

Here’s what dentsu’s global restructuring will mean for India

<p><div class="image-container float_right click-to-enlarge" style="width:342px"><div class="image"><a title_source="Business Insider / Daniel Goodman" title_caption="" class="zoomin" href="http://static2.businessinsider.com/image/50f42ca169bedd806d000002-960/cash-hands-stealing-debt-collector.jpg"><span class="click-to-enlarge-icon" title="Click to enlarge"></span></a></div><p class="source"><a href="http://www.businessinsider.com/yourmoney">Business Insider / Daniel Goodman</a></p></div>Ad agencies who buy media on web sites routinely ask for unwarranted gifts, according to <a href="http://www.digiday.com/publishers/what-publishers-really-think-of-agencies/">an anonymous publisher interviewed by Digiday</a>.</p>
<p>Bribes, kickbacks, gift-giving, rebates and volume discount schemes are a common part of how deals in <keyword id="35666" type="COMPANY" weightage="100" keywordseo="advertising">advertising</keyword> get done. Yet few in the business are willing to admit it on the record. We've covered a number of cases -- <a href="http://www.businessinsider.com/inside-the-posterscope-fraud-that-rocked-aegis-2012-7">at Aegis's Posterscope unit</a> and <a href="http://www.businessinsider.com/federal-probe-walmart-ceo-allegedly-took-diamonds-and-yachts-from-contractor-2012-5">at Walmart</a>, to name two -- but the media is usually disinterested in the issue.</p>
<p>Digiday's source, however,is plainly sick of the way ad buyers ask publishers to sprinkle a little sugar on their offers. Here's what he or she said:</p>
<p style="padding-left: 30px;">It might be because they are lazy or ill-informed about the client’s business or mistreated by the client or all of the above, but it happens more than it should, and it’s a huge shame. ... the willingness to be bought (jeans parties, Southampton parties, concert tickets, whatever),</p>
<p style="padding-left: 30px;">[Agency staff] don’t return calls, don’t give meaningful feedback, [arrive] late to meetings, [act] unprofessional, abuse relationships by asking for stuff that far exceeds reasonable T&amp;E spending.</p>
<p><strong>Here's some of our previous coverage of ad agency shenanigans:</strong></p>

Publisher Accuses Ad Agencies Of Routinely Taking Bribes

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>There's a problem permeating the <keyword id="35666" type="COMPANY" weightage="100" keywordseo="advertising">advertising</keyword> industry. It has been going on for years. And barely anybody within the agency world wants to admit it even exists.</p><p>There's a lack of transparency about what <span style="line-height: 1.5em;">marketers at brands pay agencies and what they actually get for their money.</span></p><p>At the center of the issue are media rebates. Media companies (in TV, newspapers, digital, radio, and so on) pay them to agencies to keep client dollars (in the form of ad buys) rolling in. Even when those dollars may be more efficiently spent elsewhere.</p><p>Usually, most client-agency contracts insist that all discounts, rebates, and benefits earned by media spending be returned to the client. But if a TV station returns a discount to a media-buying agency there is no way for the client to know about that payment if the agency does not disclose it.</p><p><span style="background-color: #ffffff;">Agencies have been accused of padding their margins with these payments.</span> Clients haven't bothered to pursue them because it would be complicated and resource-intensive to do so. Critics regard them as bribes or kickbacks. Agencies have defended them as a legitimate way to maintain their profitability and note that if clients felt they were being ripped off they would go elsewhere.</p><p>Media rebates are set to become such a big problem this year that <a href="http://www.businessinsider.com/pivotal-research-group-downgrades-wpp-publicis-omnicom-and-ipg-2015-4">Brian Wieser, an analyst at Pivotal Research Group, has downgraded his stock ratings for all of the advertising agency holding companies Pivotal covers </a>- reducing IPG from buy to hold, and WPP, Omnicom, and Publicis Groupe from hold to sell. He advises investors in advertising agency companies to <a href="http://www.businessinsider.com/pivotal-research-group-downgrades-wpp-publicis-omnicom-and-ipg-2015-4">"move to the sidelines" or "exit the sector altogether</a>."</p><h3>The world's biggest advertising agency holding groups deny there is a problem</h3><p>The controversy surrounding rebates, kickbacks, and agency transparency is not new. <a href="http://www.businessinsider.com/inside-the-posterscope-fraud-that-rocked-aegis-2012-7">In 2012 the former president and finance director of Posterscope in the US, a unit of European holding company Aegis, pleaded guilty to executing $20 million in accounting fraud</a>. In 2010 <a href="http://www.cbsnews.com/news/why-ftc-should-examine-valassis-and-news-americas-500m-settlement/">News America Marketing paid $500 million to settle an antitrust action</a> in which it was accused of rigging prices in the grocery coupon business. In the same year, <a href="http://www.cbsnews.com/news/printing-money-secret-transcripts-reveal-how-grey-group-juggled-clients-cash/">Grey Group lost an appeals court ruling that unveiled a questionable rebate scheme in its London and New York offices</a>, that went back decades. <a href="http://www.cbsnews.com/news/the-scale-of-the-stupidity-at-leo-burnett/">Publicis agency Leo Burnett was accused of defrauding the US Army account in 2009</a>. The list goes on.<span style="background-color: #00ff00;"><br /></span></p><p>But rebates reared their head again in March this year at the Association of National Advertisers (ANA) Forum, when former Mediacom CEO Jon Mandel alleged that agency "kickbacks" are still "widespread" and cited them as one of the reasons he left the agency world, <a href="http://adage.com/article/agency-news/mediacom-ceo-mandel-skewers-agencies-incentives/297470/">AdAge reported</a>.</p><p>"Have you ever wondered why fees to agencies have gone down and yet the declared profits to these agencies are up?" <span>Mandel</span> said at the time.</p><p><a href="http://adage.com/article/agency-news/groupm-responds-industry-rebate-allegations/297480/">GroupM, the media division of the WPP group that owns Mediacom, denied the allegations</a>, saying: "In the US, rebates or other forms of hidden revenue are not part of GroupM's trading relationships with vendors."</p><p>The three biggest advertising agency holding groups - Publicis Groupe, Omnicom, and WPP - reported their quarterly earnings this week<span style="line-height: 1.5em;">. On the earnings calls with analysts, all three were asked about rebates. Here are their responses:</span></p><p><strong>Publicis Groupe CEO Maurice Lévy</strong></p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div><a href="http://adage.com/article/agency-news/publicis-groupe-q1-revenues-32-boosted-sapient-deal/298146/">As reported by AdAge</a>:</p><p style="padding-left: 30px;"><span style="line-height: 1.5em;">We are not suffering at all from this kickback situation. Most of our clients know exactly what our practices are. They know that we are extremely rigorous and that we are playing by the rules. </span></p><p style="padding-left: 30px;">So we are suffering as an industry, because there has been a lot of noise, which has been made by a former Mediacom employee. But when it comes to [Publicis Groupe], we have contracts which are scrupulously respected and which have been audited on a regular basis by our clients. It's mad that there has been so much noise made about somebody who left the industry seven or eight years ago, who probably has no idea what's going on. </p><p><strong>Omnicom CEO John Wren</strong></p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>(Ahead of Wren answering the question, Omnicom Media Group CEO Daryl Simm outlined that its media agencies in the US do not seek kickbacks and that the company has "comprehensive contracts" with clients, which specify "performance requirements" too.)</p><p>"I am happy for the question because there has been a lot of innuendo and comments against the industry, and we know how we operate, and have consistently operated. So clearing the air on this is a positive thing."</p><p>"One other thing is, we are fully participating, I think, the ANA after having allowed that presentation to occur and there is now, I think, a working group between the ANA [and the 4As (American Association of Advertising Agencies).]</p><p>"It was somewhat odd to me that no specific allegation came against anybody, even though that presentation had redacted contracts and other things. So we are little bit confused. We don't find it helpful. So as quickly as jointly the ANA and the 4As can get to the conclusion the better off we will all going to be."</p><p><strong>WPP chief executive Sir Martin Sorrell</strong></p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div></p><p>Sorrell was the most forthcoming of the three agency holding groups on his company's Q1 earnings call on Thursday. <span>(IPG has yet to report its Q1 earnings.)</span></p><p>He said that trade association the World Federation of Advertisers had invited the heads of the six largest agency holding groups to discuss the issues surrounding transparency and questions from advertisers' procurement departments.</p><p>Yet only two of the six turned up. "Myself and one other," Sorrell said, not revealing who the other was.</p><p>WPP is the only one of the six agency holding groups that discloses both gross revenues versus revenues net of media trading in its earnings statements. Indeed, this is the reason Pivotal analyst Wieser said WPP is probably most "immunized" against the kickbacks/rebates issue. Sorrell has repeatedly called on his rival companies to break out their revenues in this way.</p><p>Sorrell said on the call (referring back to Wieser's initial note, calling agencies out on the issue surrounding media agency fees):</p><p style="padding-left: 30px;">Until we get people who are prepared to put out those numbers - and I think the number to put out is net sales versus the revenue number - if we are looking for transparency this is really important. This is not just about programmatic [advertising,] it's barter ... broking, telesales, data investment management, other people do have some research businesses, including Omnicom. They do not show the different between revenue and net sales.</p><p style="padding-left: 30px;">By the way, the irony of this is that if they showed net sales they would show a different margin, and maybe you wouldn't see a 5% revenue increase evaporate into no margin increase or 10 basis points.</p><p style="padding-left: 30px;">We think this is really important. It wasn't so important when data was the only element of it, it was a stable element and wasn't growing rapidly. [Programmatic spend globally was $800 million in billings and is predicted to be] $1 billion this year.</p><p style="padding-left: 30px;">With programmatic it will be a different story. Michael Roth [IPG CEO], I remind you, he thought 50% of media buying will be programmatic this year. In that case it's material. We are nowhere near that level, and not for many years.</p><h3>Report calls client/agency relationship "disturbing"</h3><p>On Thursday, the <a href="http://www.ana.net/content/show/id/enhancing-relationships">ANA released the findings of a survey of 129 of its members and 105 agencies about the client/agency relationship</a>. And it doesn't look pretty for the agencies.</p><p>While the report found that for the most part client/agency relationships were strong, there were several pockets of dissatisfaction, namely with reference to fees:</p><ul><li><strong style="line-height: 1.5em;">Clients and agencies are not in alignment on the fairness of their compensation arrangements.</strong> Agencies have much lower levels of agreement that compensation agreements are fair. Both clients and agencies are lukewarm on the value of performance-based compensation as a motivator of agency performance.</li><li><strong style="line-height: 1.5em;">Clients and agencies have different views on the value procurement adds to client/agency relationships.</strong> Only 47% of clients agree that procurement adds value, while just 10% of agencies agree.</li></ul><p><span style="color: #222222; line-height: 1.5em;">In a press release, ANA president and CEO Bob Liodice said: "We are pleased to see that at the core, client/agency relationships are sound. Having that strong foundation is a cause for optimism. However, there are disturbing legacy issues that continue to plague the partnership that have been further complicated by blossoming transparency concerns. The ANA is committed to making tangible improvements and will be working in partnership with the 4As to actively address these issues."</span></p><h3>"There's a lot more that's going to come out"</h3><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>Adam Lutz worked within large agencies in New York before he quit in 2010 to form his own media division, Proove Accountable Media, within DiMassimo Goldstein, where he is now a partner.</p><p>The independent company claims to be "fully transparent" and operates no pre-arranged contracts with media owners or data providers. Its client roster includes Calvin Klein, Party Poker, and Tommy Hilfiger.</p><p>He told Business Insider: "I got frustrated because clients were not getting the best recommendations, in their best interests, [the agencies were just] fulfilling previously set agreements by the holding companies."</p><p>Lutz said agency trading desks frequently mark up their inventory - telling the client the media cost $3 CPM (cost per-thousand impressions) when it actually only cost $2 CPM, for example - and media plans for clients get thrown back because a certain allocation wasn't given (40% to Yahoo, 20% to MSN, 20% to AOL, for example), which is only based on a previous network deal (whereby the agency holding group guarantees a certain level of spend over the course of a contract, usually a year) and not the client's best interests.</p><p>He recalled a scenario from his agency days: "I met a great attribution tech startup in San Francisco. They had the coolest technology, better than any attribution modeling I had ever seen. I said 'this will be great for my client. This could be something that drives results and efficiencies.'</p><p>"The media division said 'great.' Then when we tried to get this set-up for the client it got stopped by someone senior at [the holding company] who said: 'You can't take this new tech because it's not a [holding company]-approved vendor. We have our own attribution modeling tech.' But it was built 10 years ago. It was totally outdated and a joke ... I said: "I said this is ridiculous, that thing was built 10 years ago, this is new, it's dirt-cheap. But at the end of the day I could not take it to the client. And all of this is why I left the business."</p><p>That may have been 10 years ago, but Lutz said the situation hasn't changed today.</p><p>Lutz added: "There's a lot more that's going to come out, clients are going to start questioning their agencies' practices. But agencies have been doing this for 60 years, they're very good at covering up, or saying that we do not do that any more."</p><h3>What next?</h3><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>As Omnicom's Wren pointed out, no recent, specific allegations have been made. But they might be forthcoming as debate in the industry around rebates rattles on.</p><p>Business Insider contacted all the agency holding groups recently downgraded by Pivotal Research Group for comment on Wieser's notion that investors in the sector should "move to the sidelines" or "quit the sector altogether."</p><p>Only WPP responded to Business Insider's request for comment, referring us back to <a href="http://adage.com/article/agency-news/groupm-responds-industry-rebate-allegations/297480/">the previous statement given to AdAge by GroupM chief digital officer Rob Norman.</a></p><p>As previously mentioned, it will probably take more than one advertiser to speak out: It's a timely and costly exercise to audit your contractors. That becomes even more complicated in the world of programmatic advertising where a single dollar from a client's advertising budget can pass through many different vendors (<a href="http://www.businessinsider.com/social-media-marketing-landscape-complicated-2012-5">as the famous LUMAscape illustrates</a>) before reaching a consumer.</p><p>Expect to read further stories like these over the coming months. There's nothing to say anybody is breaking the rules, or indeed any laws, but clients are about to apply increasing scrutiny to exactly where their marketing budgets are going, and if media is being bought in their best interests.</p><p>As Pivotal's Wieser summarized in his recent research note on Omnicom's earnings: "While we recognize that agency holding companies convey that they are transparent with clients about the topic, our conversations with suppliers and clients convey to us that many clients may not fully understand specific arrangements that are in place between suppliers and agencies. This is ultimately consistent with the views articulated at last month's ANA conference and echoed by many others in the industry as well. We continue to expect further noise to emerge on this topic over the course of the year."</p><p><em>Business Insider is investigating the client/agency transparency issue. If you would like to provide information, both on-the-record, or anonymously, please contact loreilly@businessinsider.com</em></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/lego-batman-v-superman-trailer-dawn-of-justice-2015-4">This Lego version of the 'Batman v. Superman' trailer is absolute gold</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="xlMzRudDrPpcn4CpqKepYCVBbT_X-eEG" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Nobody wants to talk about the 'disturbing' issue plaguing the advertising industry right now

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>There's a problem permeating the <keyword id="35666" type="COMPANY" weightage="100" keywordseo="advertising">advertising</keyword> industry. It has been going on for years. And barely anybody within the agency world wants to admit it even exists.</p><p>There's a lack of transparency about what <span style="line-height: 1.5em;">marketers at brands pay agencies and what they actually get for their money.</span></p><p>At the center of the issue are media rebates. Media companies (in TV, newspapers, digital, radio, and so on) pay them to agencies to keep client dollars (in the form of ad buys) rolling in. Even when those dollars may be more efficiently spent elsewhere.</p><p>Usually, most client-agency contracts insist that all discounts, rebates, and benefits earned by media spending be returned to the client. But if a TV station returns a discount to a media-buying agency there is no way for the client to know about that payment if the agency does not disclose it.</p><p><span style="background-color: #ffffff;">Agencies have been accused of padding their margins with these payments.</span> Clients haven't bothered to pursue them because it would be complicated and resource-intensive to do so. Critics regard them as bribes or kickbacks. Agencies have defended them as a legitimate way to maintain their profitability and note that if clients felt they were being ripped off they would go elsewhere.</p><p>Media rebates are set to become such a big problem this year that <a href="http://www.businessinsider.com/pivotal-research-group-downgrades-wpp-publicis-omnicom-and-ipg-2015-4">Brian Wieser, an analyst at Pivotal Research Group, has downgraded his stock ratings for all of the advertising agency holding companies Pivotal covers </a>- reducing IPG from buy to hold, and WPP, Omnicom, and Publicis Groupe from hold to sell. He advises investors in advertising agency companies to <a href="http://www.businessinsider.com/pivotal-research-group-downgrades-wpp-publicis-omnicom-and-ipg-2015-4">"move to the sidelines" or "exit the sector altogether</a>."</p><h3>The world's biggest advertising agency holding groups deny there is a problem</h3><p>The controversy surrounding rebates, kickbacks, and agency transparency is not new. <a href="http://www.businessinsider.com/inside-the-posterscope-fraud-that-rocked-aegis-2012-7">In 2012 the former president and finance director of Posterscope in the US, a unit of European holding company Aegis, pleaded guilty to executing $20 million in accounting fraud</a>. In 2010 <a href="http://www.cbsnews.com/news/why-ftc-should-examine-valassis-and-news-americas-500m-settlement/">News America Marketing paid $500 million to settle an antitrust action</a> in which it was accused of rigging prices in the grocery coupon business. In the same year, <a href="http://www.cbsnews.com/news/printing-money-secret-transcripts-reveal-how-grey-group-juggled-clients-cash/">Grey Group lost an appeals court ruling that unveiled a questionable rebate scheme in its London and New York offices</a>, that went back decades. <a href="http://www.cbsnews.com/news/the-scale-of-the-stupidity-at-leo-burnett/">Publicis agency Leo Burnett was accused of defrauding the US Army account in 2009</a>. The list goes on.<span style="background-color: #00ff00;"><br /></span></p><p>But rebates reared their head again in March this year at the Association of National Advertisers (ANA) Forum, when former Mediacom CEO Jon Mandel alleged that agency "kickbacks" are still "widespread" and cited them as one of the reasons he left the agency world, <a href="http://adage.com/article/agency-news/mediacom-ceo-mandel-skewers-agencies-incentives/297470/">AdAge reported</a>.</p><p>"Have you ever wondered why fees to agencies have gone down and yet the declared profits to these agencies are up?" <span>Mandel</span> said at the time.</p><p><a href="http://adage.com/article/agency-news/groupm-responds-industry-rebate-allegations/297480/">GroupM, the media division of the WPP group that owns Mediacom, denied the allegations</a>, saying: "In the US, rebates or other forms of hidden revenue are not part of GroupM's trading relationships with vendors."</p><p>The three biggest advertising agency holding groups - Publicis Groupe, Omnicom, and WPP - reported their quarterly earnings this week<span style="line-height: 1.5em;">. On the earnings calls with analysts, all three were asked about rebates. Here are their responses:</span></p><p><strong>Publicis Groupe CEO Maurice Lévy</strong></p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div><a href="http://adage.com/article/agency-news/publicis-groupe-q1-revenues-32-boosted-sapient-deal/298146/">As reported by AdAge</a>:</p><p style="padding-left: 30px;"><span style="line-height: 1.5em;">We are not suffering at all from this kickback situation. Most of our clients know exactly what our practices are. They know that we are extremely rigorous and that we are playing by the rules. </span></p><p style="padding-left: 30px;">So we are suffering as an industry, because there has been a lot of noise, which has been made by a former Mediacom employee. But when it comes to [Publicis Groupe], we have contracts which are scrupulously respected and which have been audited on a regular basis by our clients. It's mad that there has been so much noise made about somebody who left the industry seven or eight years ago, who probably has no idea what's going on. </p><p><strong>Omnicom CEO John Wren</strong></p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>(Ahead of Wren answering the question, Omnicom Media Group CEO Daryl Simm outlined that its media agencies in the US do not seek kickbacks and that the company has "comprehensive contracts" with clients, which specify "performance requirements" too.)</p><p>"I am happy for the question because there has been a lot of innuendo and comments against the industry, and we know how we operate, and have consistently operated. So clearing the air on this is a positive thing."</p><p>"One other thing is, we are fully participating, I think, the ANA after having allowed that presentation to occur and there is now, I think, a working group between the ANA [and the 4As (American Association of Advertising Agencies).]</p><p>"It was somewhat odd to me that no specific allegation came against anybody, even though that presentation had redacted contracts and other things. So we are little bit confused. We don't find it helpful. So as quickly as jointly the ANA and the 4As can get to the conclusion the better off we will all going to be."</p><p><strong>WPP chief executive Sir Martin Sorrell</strong></p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div></p><p>Sorrell was the most forthcoming of the three agency holding groups on his company's Q1 earnings call on Thursday. <span>(IPG has yet to report its Q1 earnings.)</span></p><p>He said that trade association the World Federation of Advertisers had invited the heads of the six largest agency holding groups to discuss the issues surrounding transparency and questions from advertisers' procurement departments.</p><p>Yet only two of the six turned up. "Myself and one other," Sorrell said, not revealing who the other was.</p><p>WPP is the only one of the six agency holding groups that discloses both gross revenues versus revenues net of media trading in its earnings statements. Indeed, this is the reason Pivotal analyst Wieser said WPP is probably most "immunized" against the kickbacks/rebates issue. Sorrell has repeatedly called on his rival companies to break out their revenues in this way.</p><p>Sorrell said on the call (referring back to Wieser's initial note, calling agencies out on the issue surrounding media agency fees):</p><p style="padding-left: 30px;">Until we get people who are prepared to put out those numbers - and I think the number to put out is net sales versus the revenue number - if we are looking for transparency this is really important. This is not just about programmatic [advertising,] it's barter ... broking, telesales, data investment management, other people do have some research businesses, including Omnicom. They do not show the different between revenue and net sales.</p><p style="padding-left: 30px;">By the way, the irony of this is that if they showed net sales they would show a different margin, and maybe you wouldn't see a 5% revenue increase evaporate into no margin increase or 10 basis points.</p><p style="padding-left: 30px;">We think this is really important. It wasn't so important when data was the only element of it, it was a stable element and wasn't growing rapidly. [Programmatic spend globally was $800 million in billings and is predicted to be] $1 billion this year.</p><p style="padding-left: 30px;">With programmatic it will be a different story. Michael Roth [IPG CEO], I remind you, he thought 50% of media buying will be programmatic this year. In that case it's material. We are nowhere near that level, and not for many years.</p><h3>Report calls client/agency relationship "disturbing"</h3><p>On Thursday, the ANA released the findings of a survey of 129 of its members and 105 agencies about the client/agency relationship. And it doesn't look pretty for the agencies.</p><p>While the report found that for the most part client/agency relationships were strong, there were several pockets of dissatisfaction, namely with reference to fees:</p><ul><li><strong style="line-height: 1.5em;">Clients and agencies are not in alignment on the fairness of their compensation arrangements.</strong> Agencies have much lower levels of agreement that compensation agreements are fair. Both clients and agencies are lukewarm on the value of performance-based compensation as a motivator of agency performance.</li><li><strong style="line-height: 1.5em;">Clients and agencies have different views on the value procurement adds to client/agency relationships.</strong> Only 47% of clients agree that procurement adds value, while just 10% of agencies agree.</li></ul><p><span style="color: #222222; line-height: 1.5em;">In a press release, ANA president and CEO Bob Liodice said: "We are pleased to see that at the core, client/agency relationships are sound. Having that strong foundation is a cause for optimism. However, there are disturbing legacy issues that continue to plague the partnership that have been further complicated by blossoming transparency concerns. The ANA is committed to making tangible improvements and will be working in partnership with the 4As to actively address these issues."</span></p><h3>"There's a lot more that's going to come out"</h3><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>Adam Lutz worked within large agencies in New York before he quit in 2010 to form his own media division, Proove Accountable Media, within DiMassimo Goldstein, where he is now a partner.</p><p>The independent company claims to be "fully transparent" and operates no pre-arranged contracts with media owners or data providers. Its client roster includes Calvin Klein, Party Poker, and Tommy Hilfiger.</p><p>He told Business Insider: "I got frustrated because clients were not getting the best recommendations, in their best interests, [the agencies were just] fulfilling previously set agreements by the holding companies."</p><p>Lutz said agency trading desks frequently mark up their inventory - telling the client the media cost $3 CPM (cost per-thousand impressions) when it actually only cost $2 CPM, for example - and media plans for clients get thrown back because a certain allocation wasn't given (40% to Yahoo, 20% to MSN, 20% to AOL, for example), which is only based on a previous network deal (whereby the agency holding group guarantees a certain level of spend over the course of a contract, usually a year) and not the client's best interests.</p><p>He recalled a scenario from his agency days: "I met a great attribution tech startup in San Francisco. They had the coolest technology, better than any attribution modeling I had ever seen. I said 'this will be great for my client. This could be something that drives results and efficiencies.'</p><p>"The media division said 'great.' Then when we tried to get this set-up for the client it got stopped by someone senior at [the holding company] who said: 'You can't take this new tech because it's not a [holding company]-approved vendor. We have our own attribution modeling tech.' But it was built 10 years ago. It was totally outdated and a joke ... I said: "I said this is ridiculous, that thing was built 10 years ago, this is new, it's dirt-cheap. But at the end of the day I could not take it to the client. And all of this is why I left the business."</p><p>That may have been 10 years ago, but Lutz said the situation hasn't changed today.</p><p>Lutz added: "There's a lot more that's going to come out, clients are going to start questioning their agencies' practices. But agencies have been doing this for 60 years, they're very good at covering up, or saying that we do not do that any more."</p><h3>What next?</h3><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>As Omnicom's Wren pointed out, no recent, specific allegations have been made. But they might be forthcoming as debate in the industry around rebates rattles on.</p><p>Business Insider contacted all the agency holding groups recently downgraded by Pivotal Research Group for comment on his notion that investors in the sector should "move to the sidelines" or "quit altogether."</p><p>Only WPP responded to Business Insider's request for comment, referring us back to <a href="http://adage.com/article/agency-news/groupm-responds-industry-rebate-allegations/297480/">the previous statement given to AdAge by GroupM chief digital officer Rob Norman.</a></p><p>As previously mentioned, it will probably take more than one advertiser to speak out: It's a timely and costly exercise to audit your contractors. That becomes even more complicated in the world of programmatic advertising where a single dollar from a client's advertising budget can pass through many different vendors (<a href="http://www.businessinsider.com/social-media-marketing-landscape-complicated-2012-5">as the famous LUMAscape illustrates</a>) before reaching a consumer.</p><p>Expect to read further stories like these over the coming months. There's nothing to say anybody is breaking the rules, or indeed any laws, but clients are about to apply increasing scrutiny to exactly where their marketing budgets are going, and if media is being bought in their best interests.</p><p>As Pivotal's Wieser summarized in his recent research note on Omnicom's earnings: "While we recognize that agency holding companies convey that they are transparent with clients about the topic, our conversations with suppliers and clients convey to us that many clients may not fully understand specific arrangements that are in place between suppliers and agencies. This is ultimately consistent with the views articulated at last month's ANA conference and echoed by many others in the industry as well. We continue to expect further noise to emerge on this topic over the course of the year."</p><p><em>Business Insider is investigating the client/agency transparency issue. If you would like to provide information, both on-the-record, or anonymously, please contact loreilly@businessinsider.com</em></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/lego-batman-v-superman-trailer-dawn-of-justice-2015-4">This Lego version of the 'Batman v. Superman' trailer is absolute gold</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="xlMzRudDrPpcn4CpqKepYCVBbT_X-eEG" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

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