#RebateGate. The Advertiser-Agency Disconnect. Conflict of Interest. Part 2: Nature of Relationship
The 2016 research on media transparency in the US market by K2 Intelligence and the Association of National Advertisers was fundamental in shedding light on the status quo as pertains to how advertisers and agencies see their respective roles in their relationship. On the advertiser’s part it would seem quite natural to expect the agency to act in their former’s best interests. As outlined in the “Transparency Guiding Principles of Conduct” issued by 4A’s in January 2016, “The default principle in all client/agency relationships where the agency is agent and the client is principal is full disclosure and full transparency in media planning and buying, unless there is an exception that the client has agreed to in advance and is covered by a separate agreement. Further, the client/agency agreement should specify that the client is the principal and the agency is the agent. However, the same Guiding Principles also make mention of the agency’s ability to also act as principal: “The agency should always ensure that the client clearly understands the nature, implications and benefits of any opt-in products and services, including disclosed and non-disclosed models. These should be documented with an opt-in agreement, with a clear explanation of any… Read more »
