‘Transparency debate risks being a broad-brush on the industry’ warns Interpublic global CEO

L:R Bob Liodice and Michael Roth speaking in Boca Raton Florida.

L:R Bob Liodice and Michael Roth speaking in Boca Raton Florida.

The global CEO of IPG Mediabrands’ owner Interpublic has admitted he is worried that the growing global transparency debate is undermining marketer confidence by tarring media agencies with a “broad-brush”.

Speaking at the ANA Advertising Financial Management Conference in Boca Raton, Florida, overnight Michael Roth told the room: “The issue of transparency is paramount to the issue of trust.”

However, the man who is responsible for major agency brands including UM, Initiative and McCann, also warned that he worried the imminent release of two ANA reports examining transparency had the potential to undermine trust between marketers and their agencies saying: “I’m very comfortable with our transparency with our clients.”

“What I’m worried about is if the results of (the ANA report) show that there are some transactions going on in the industry that isn’t consistent with our approach to the industry.

“I want to be sure this is not a broad-brush on the entire industry and I want to be make sure that it is not turned into an industry problem. If it is then fine we have to deal with it as an issue.”

Roth acknowledged the growing concern among marketers about the transparency and arbitrage in the digital programmatic space, particularly around agency programmatic trading desks such as Interpublic’s Cadreon and GroupM’s Xaxis.

“On the digital buying side we are agents for our clients. Period,” said Roth.

“As far as I’m concerned we don’t buy inventory, we don’t sell inventory so that when we represent clients we truly are agents for the client.

“The issue comes back to can you be an agent and a principal at the same time? Frankly my view is we shouldn’t. Can you? Of course you can and we have had clients who have said we don’t care as long as we get results.

“Until the market takes a (broader) position we will remain agents. We are an agent of our clients particularly on the programmatic side.”

Asked if his declaration on Cadreon applied only to the US or globally Roth said: “If there is some place in the world where we are doing it (acting as a principal) then I want to know about it.”

Roth also acknowledged how comments by former Mediacom CEO Jon Mandel at an ANA conference last year had helped fan a wider transparency debate both in the US and globally.

“After the speaker last year this became an issue,” he said. “We had clients say we want this language in the contract and the language that was already in the contract was tougher than the language that was in the contract.

“The issue should be dealt with on a contractual basis and I have no problem with clients coming in an auditing that. It goes to the issue of trust.”

Roth noted that when he first became CEO of Interpublic he went through their contracts and rebate agreements globally and made sure that where there was uncertainty rebates were being made to their clients.

“In certain countries rebates are fine – in fact they are are encouraged – of course the issue is how those rebates are treated and who is entitled to the rebate?,” he said. “My answer is that it is the client who is entitled to the rebate.

“If the client wants to allocate that rebate to us to reduce their fee then terrific. The issue is a contractual one… going back (when we reviewed this) we ended up giving money back to our clients. We ended up having a fund of some $300m back to clients.

“I believe in transparency. I believe our clients are entitled to understand what is happening to their media dollars.”

Nic Christensen in Boca Raton 


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