MFA CEO says ‘market forces will be the policeman’ on transparency code of conduct
Madden: market forces will police non compliance
The Media Federation of Australia has admitted it is powerless to police a new code designed to crack down on problems with transparency for clients, and will have to rely on “market forces” to do so.
The CEO of the MFA Sophie Madden told Mumbrella the body was not in a position to enforce the new codes, which it devised with consultants PwC, but said it was about setting up a dialogue between advertisers and their agencies.
“One of the things that came up when we started this work with PwC was the role of market forces,” said Madden. “We have set a framework and an expectation and then it will be market forces that will be the policeman in non-compliance.
“It is about setting expectations for how advertisers and agencies deal together. We are not a regulator and so it is about commercial in confidence and operational issues between advertisers and their agencies.”
The new framework also covers so-called ‘value banks’ – which are generally understood to be heavily discounted or free ad space given to media agencies by media owners in return for increased share of advertiser spend. These spots are either given for use by a particular client, or for the group as a whole to distribute as it sees fit.
They came into the spotlight after Mediacom admitted it had misused value banks after an internal investigation into TV misreporting among some clients. No other agency group has publicly admitted to having value banks.
Madden was keen to downplay their inclusion in the new framework, saying: “The first line (of the framework) on value banks says ‘where value banks exist’. It is not necessarily a term that existed before a year ago and we couldn’t ignore it.
“It doesn’t mean that a lot of agencies do it, but it is an area of concern for advertisers and that’s why it is included in there.”
Madden argued the MFA was unable to enforce the code because it has no visibility on commercial contracts between agencies and clients.
“I think that the framework is very much around advertisers and agencies,” she said. “When we started exploring this issue one of the challenges was in determining our role, as we are not a regulator. (The question was) how do we find a constructive role in something that is very much between advertisers and their agencies in commercial in confidence dealings.
“What agencies and clients then choose to do in terms of their own contractual compliance and their own set up in that space we can’t dictate, but it sets a framework to start that conversation.”
Asked if the MFA would like to see a similar code for client behaviour Madden said: “It would be great for a reciprocal piece of work (from marketer group AANA) but that is very much a matter for them. This was about the MFA.”
She also noted that this was just the first in a series of initiatives to roll out in 2016: “It is the first in a series of initiatives we are doing both as MFA only initiatives and joint MFA/AANA initiatives. We are also working on an industry wide ethics program, which is more an MFA only initiative.”
Nic Christensen
Related content:
- MFA launches ‘transparency framework’ on rebates, value banks and agency trading desks
- The questions clients & agencies should ask about the MFA transparency framework
- Media Federation says there are no wider industry problems and no need for tighter regulation
Value banks…. its like you get presents and gifts throughout the year for a family member, but decide to rather sell it to them.
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what an insipid stance by the MFA
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Market forces will retain the status quo.
Procurement will still focus on price and internal/ external audit will still carry out checks.
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