COLOGNE – After more than a year and innumerable reports and headlines, WPP CEO Sir Martin Sorrell still doesn’t understand the genesis of widespread commentary about agency-client transparency in the United States. He says those who are worried about transparency should take a look at the Middle East, Japan and China.
“It’s unfortunate what has happened. What happened with the ANA last year, for reasons that I don’t really understand to this day…reports issued, full of innuendo but no fact,” Sorrell says in this interview with Beet.TV at the DMEXCO advertising and media trade show.
“What it’s done is create a different atmosphere which I don’t think has been helpful.”
Just over a year ag,o the Association of National Advertisers issued a report that roiled the waters of the advertising and media agency world. It concluded that some agencies had routinely padded their profits by using such non-transparent practices as taking rebates from media sellers.
To Sorrell, those accusations consisted of “aspersions which I think are totally unjustified, or certainly from what we’ve seen.”
He doesn’t cite specifics about the Middle East except to say that people are “examining the entrails.” For Japan he seems to be referencing the overcharging scandal that engulfed a major ad agency in September of 2016 after one of its biggest clients suspected something was amiss in its digital media buys.
Sorrell says a WPP client in China asked it to audit several state-owned enterprises (SOE’s) “on the media front because we didn’t use brokers in China, where there was let’s say a fog around the operations. We were asked to look at one of the areas of potential corruption advertising billings. In China there’s opacity in relation to the supply chain.”
Sorrell believes the transparency issue is of relatively minor importance in the U.S. market “where there are no rebates and relatively more important in markets like Japan, where I think it’s true to say there’s still total opacity on what the price of a TV spot is. It’s totally unknown as to what many of our clients are paying for their spots.”
Addressing the transformation that has swept the advertising and media industries—totally reshaping how clients and agencies interact—Sorrell lists three areas that stand out.
Media and data: GroupM and Kantar each represent 25% of WPP’s business.
The growing importance of digital agencies of record: “Digital agencies going into clients through the digital door and then expanding above the line.”
The “veritable explosion” of production platforms: Among them WPP’s Hogarth Worldwide that enable marketers to “pull down their marketing assets effectively without reproducing them and reinventing the wheel in every market.”
This video is part a series that examines programmatic from both the seller and the buyer perspective. It is presented by PubMatic. For more videos from the series, please visit this page.