Agencies that don’t comply with the American Association of Advertising Agencies’ (4As) Transparency Guiding Principles of Conduct (TGPC) will risk losing their memberships.
Under the new rule, which the agency trade body blogged about on Monday, anyone (from marketers to executives from other agencies) who finds an agency is not compliant with the 4As’ guidelines can alert the body’s board, which will investigate through a trial or meetings.
This announcement further distances the 4As from the Association of National Advertisers (ANA), which released separate guidelines in June.
While the two trade bodies once discussed solving the transparency issue together, that effort broke down in January when the 4As released its TGPC, which ANA CEO Bob Liodice said failed to “fully or adequately reflect the best interests of marketers.”
Some insiders say the schism happened because of the 4As’ refusal to allow audits at the holding company level. The ANA argued that because rates are often negotiated at that level, marketers must be able to audit across holding company groups. The 4As said such audits would be impossible to execute because of silos within holding companies.
But the trade groups went their separate ways because of fundamental differences in their views on agency-client contracts, said Nancy Hill, CEO of the 4As.
“The ANA wanted to take a much more prescriptive process in terms of what they believed contract language should look like,” she said. “We wanted to stick with guidelines and principles and allow that contract language to be negotiated between clients and their agencies, not between trade associations.”
When the 4As said it would not be involved in drafting a contract template, the ANA walked, Hill said.
“It has to be between the client and agency,” she said. “They have to solve it on a contract-by-contract basis.”
Despite the communication breakdown, the 4As intends to hold agencies responsible for their client relationships. The trade group will host a series of member meetings to discuss its own guidelines in detail and allow questions. The first of these meetings was held last week in New York with about 40 attendees.
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“We’re walking [members] through the guidelines and discussing with them pretty specifically about what they mean and what they don’t mean,” Hill said. “They just really want to dig in a little deeper so they are free to ask questions without the press being around.”
Agency executives will be responsible for teaching transparency and disclosure best practices to their employees, Hill said.
But unlike the ANA, which has asked its own members to monitor agency behavior, the 4As is letting agencies self-regulate.
“There’s no way for us to go out and enforce [compliance],” Hill said.
