New report alleges unfair bidding practices in ad biz

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An August 9 report from the Association of National Advertisers claims that agencies steer business away from vendors and into their own in-house production units through deliberate manipulation of the bidding process for “commercials, music, events and other materials.”

The manipulation may include “asking independent post-production houses to submit bogus, inflated ‘check bids’ so that agencies can route jobs back to their in-house production shops,” according Ad Age, which broke the news yesterday.

Titled “Production Transparency in the U.S. Advertising Industry,” the ANA report was assembled with assistance from a task force of subject matter experts including 30 executives from ANA member companies and 12 related organizations.

According to the report, “eleven of the twelve subject matter experts support (the) conclusion” that “transparency concerns exist at multiple agencies and holding companies.”

Other conclusions state that, “production business processes marked by agency control of the bidding system … is sometimes dysfunctional and conflicted because the buyer can also be the seller of the services” and “the use of agency in-house production resources is not always transparent to the advertiser.”

Additional information about the report is available on the ANA’s website.

This is not the first time that the ANA has accused the industry of unfair practices. The organization released a report last year alleging that “‘cash rebates’ and ‘other non-transparent practices’ are pervasive in the U.S. media buying ecosystem.”

In response, according to Ad Age, “the 4A’s, a trade association representing agencies … claimed the report was ‘anonymous, inconclusive, and one-sided.’”

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