The ACCC report from the Digital Platform Inquiry landed last Friday with 23 recommendations, spanning competition law, consumer protection, media regulation and privacy law, reflecting the intersection of issues arising from the growth of digital platforms. One of the key issues identified is the fact that digital advertising markets are opaque with highly uncertain money flows, particularly for automated and programmatic advertising. You can read the press release from the ACCC here and download the report here.
Let’s look at how we have seen this issue of media transparency unfold over the years.
The lack of transparency in media
agencies is due to the agency remuneration models used
Way back in 2012, we were hearing about things like Value Banks and Media Rebates and Kick Backs, which made sense at the time because we had observed almost five years of downward pressure on media agency fees and media costs from advertisers. Something had to give and it was clear that what was breaking was the fundamental trust relationship between advertisers and their agencies, made even more lucrative by the rise of the digital aggregators the ACCC is reviewing today. Read more here.
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The K2 Intelligence Media Report: Rebate-Gate or Stalemate-Gate?
Even though two years earlier there was some evidence in Australia that the relationship was breaking, it was not until 2015 with the admission by Jon Mandel, ex-Mediacom USA, about media agency rebates that led to the commissioning and release of the K2 Intelligence Report into media transparency, where the whole issue became a global discussion that continues today in a more holistic form thanks to the ACCC recommendations. Read more here.
Is Media Transparency desirable
only until it costs advertisers money?
It is an interesting observation that while the industry discusses the need for media, and especially digital media, transparency we have on many occasions noticed that advertisers will forgo transparency if it means the cost of their media is higher. The trouble is that while the digital media supply chain is murky, it is also relatively cheap, especially when the ability to verify the value is taken away. Perhaps this is why some advertisers in the USA were unwilling to participate in the FBI investigation for the fear they could be seen as complicit in the situation? If the ACCC proceeds with their inquiry into digital media, will the same happen here? Read more here.
The slow motion train
wreck that is the media rebate and transparency crisis
In 2016 we prepared a review of all the articles we had written on our observations of the media ecosystem. Over the four years from 2012 to 2016, we have seen this unfold like a slow motion train wreck. The recommendations of the ACCC and their Digital Platform Inquiry is the next chapter in the on-going saga of the media ecosystem. It will be interesting for all involved to watch how this continues to unfold. Read more here.
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