• by Steve McClellan  @mp_mcclellan, June 10, 2016

Association of National Advertisers Chairman Tony Pace, who is the former CMO of the Subway Franchisee Advertising Fund Trust, sent a letter to all ANA members today to underscore the group’s belief that the harsh and negative response by the agency community to its transparency report released earlier this week was unwarranted. 

Pace insisted that the report is objective and revealing in its assessment of ongoing media-buying activity.

Among other things, agency holding companies said that the ANA's decision to issue findings based on anonymous sources stripped it of any credibility. Pace’s response: “Granting anonymity and confidentiality to sources is a standard investigative practice for assessing business conditions that K2 found essential in this case.  There was palpable fear of reprisals and other repercussions across the media buying landscape among many who considered whether to participate.”

The ANA’s membership includes nearly 1,000 companies with 15,000 brands that collectively spend or support more than $300 billion in marketing and advertising annually. The membership is comprised of more than 700 client-side marketers and nearly 250 Associate Members, which include leading agencies, law firms, suppliers, consultants, and vendors. 

Here’s Pace’s letter in its entirety: 

Dear ANA Member,

Since the release of the independent assessment by K2 Intelligence on the state of media buying practices in the U.S., there has been much conversation.  On behalf of the ANA Board of Directors, I would like to provide our membership with some factual clarity and perspective to the discussion. 

Undisclosed and deteriorating media buying practices have been discussed by the ANA Board for the past five years.  During the last fifteen months, our focus on media transparency increased substantially. When we failed to reach consensus on the extent of the issue with the agency community, the ANA Board commissioned the independent assessment conducted by K2 Intelligence.  

K2 Intelligence was an inspired choice.  They are thoroughly professional, comprehensive fact-finders with strong investigative expertise.  In the estimation of the ANA Board, K2’s report is an excellent piece of business fact-finding that is beyond reproach.  I urge all interested parties to read the 58-page report carefully, perhaps more than once, to fully absorb the extent of the findings and the implications for our industry. 

Any suggestion that the outcome of this business assessment was pre-ordained is inaccurate.  K2 Intelligence would not have accepted this assignment without assurances of complete independence and would not jeopardize its well-earned reputation for integrity for any single report. The Board was completely satisfied that K2 Intelligence provided superb clarity to the marketing community as to the practices and behaviors in the media supply chain.

To those who objected to the anonymity and confidentiality of the 150 sources interviewed by K2, let me emphasize that the participants included a significant number of current and former agency and agency holding company executives.  Granting anonymity and confidentiality to sources is a standard investigative practice for assessing business conditions that K2 found essential in this case.  There was palpable fear of reprisals and other repercussions across the media buying landscape among many who considered whether to participate.  

For those who suggested that this report failed ANA’s members, they are wrong. K2 Intelligence did ANA’s membership the highest service. We are pleased to be able to provide you, our members, with a fact-based assessment to help effectively steward your media resources.

While the ANA Board supports the thorough, objective and professional completion of the K2 report, we take no delight in its findings. It is clear that there are significant business issues that need to be addressed. We will be disseminating additional guidance around recommended principles, practices, and processes for all marketers to consider. That report will be released before the end of June

The first step in solving a problem is identifying that one exists.  When the agency community concludes that there are issues involving non-transparent business practices, and that a fundamental disconnect exists in the advertiser/agency relationship, the ANA and the Board of Directors would be pleased to collaborate with them to develop specific, well-defined solutions.

Best Regards, 

Tony