CANNES – Wall Street analyst and former media agency executive Brian Wieser has lots of observations about the controversy over the allegedly non-transparent ways some agencies make money. But his main takeaway seems to boil down to this: marketers need to read their contracts.
It sounds so simple considering all of the time, money and hoopla that has been spent on calling into question things like kickbacks and rebates. The recent report by the Association of National Advertisers and consultancy K2 certainly provided plenty of (anonymous) assertions showing that sketchy practices do exist.
In an interview with Beet.TV, Wieser—who worked for Lehman Brothers and Deutsche Bank before becoming Global Director of Forecasting for IPG’s Magna Global network and then returning to Wall Street at Pivotal Research—gives everyone involved the benefit of the doubt.
“The real issue as I see it is somewhere between a misunderstanding, disingenuity and in some cases deception,” Wieser says. “But the vast majority of the problem, it could really be a misunderstanding, where the agencies genuinely believe that they are working within the limitations, namely the language of their contracts.”
Nonetheless, Wieser believes this is an inflection point in the relations between advertisers and their creative and media agencies. One of his takeaways is that at the bare minimum, there will be continued dialogue, and most likely more scrutiny.
“The specificity in the K2 report is more than enough to make sure that most marketers will explore their contracts, do a little bit more auditing if the have the budget,” Wieser says. “Make sure that they are mindful of their factors in their negotiations going forward.”
Wieser acknowledges that the impact of the K2 report on publicly traded agency holding companies could have been worse.
“The funny thing is that stocks arguably traded up a bit on the release of the report,” he recalls. “Partly because I think there were concerns about specific holding companies being called out for specific practices. There were concerns that it would actually illustrate fraud or criminal activity. It was less bad than it appeared.”
This video was produced by Beet.TV at the Rubicon Project’s Rooftop Summit on Automated Advertising at Cannes Lions 2016. The series is sponsored by theRubiconProject. For more videos from the series, please visit this page.