Frenemies: The Epic Disruption of the Ad Business (and Everything Else) Read Online Free

been shaken down constantly. They tell us that if I get fifty million dollars, I have to pay them five million.”
    In a public conversation with Liodice weeks after Mandel’s speech, Gotlieb made a larger point, one that illustrates how the relationship between agencies and clients has changed. He challenged the ancient assumption that agencies had an obligation to “put your clients’ interests before your own.” The client is under increased pressure to produce profits, and so are the agency’s public holding companies, he said. Clients insist that the agency be paid based on the clients’ sales performance. “I don’t control the result, so I’m taking a business risk. It renders the term ‘agent’ redundant. You cease to be an ‘agent’ the moment someone puts a gun to your head and says, ‘These are the CPMs [cost per thousand viewers] you need to deliver over X period of time.” If GroupM’s contracts with clients specify that its costs or the amount of rebates received overseas are to be disclosed, GroupM complies. But if the contract is silent, so is GroupM.
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    ï¿¼On whichever side of the argument one falls, it is inarguable that Mandel’s assault came at a fraught moment and struck a raw nerve. Taken aback by the irate agency reactions, the ANA quickly did damage control, issuing this statement: “We regret any impression that agencies in general are engaged in questionable activities and apologize to those who were offended.” A few days later it appointed a joint task force with the 4A’s to study the issue.
    The ANA issued an open, competitive RFP (request for proposal) to locate a firm to conduct the study, ultimately choosing K2 Intelligence, an investigative cyber defense and compliance firm owned by Jules B. Kroll and his son, Jeremy, which employs former prosecutors and law enforcement professionals like former New York City policecommissioner Ray Kelly. The ANA also chose Ebiquity, an auditing firm that has a history of challenging agency spending practices on behalf of brand clients. Seething that the ANA made this decision on its own and chose a prosecutorial firm and, in Ebiquity, what he perceived as a business adversary, Martin Sorrell declared, “They went unilateral.” Koenigsberg was equally livid, saying of K2 Intelligence and cofounder Jules Kroll, who helped build his estimable reputation by tracking down the illicit activities of dictators: “Bringing in a spy agency didn’t send the right message. It kind of sounds like a witch hunt.” The rupture between the ANA and the 4A’s ended their joint task force. By the winter of 2016, K2 and Ebiquity were deep into interviews and jittery agencies feared the worst.
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    ï¿¼Michael Kassan was not nervous; he comfortably settled into his friend-of-all-sides stance. On the one hand, he said, Mandel “painted the industry with too broad a brush. . . . I’m a firm believer that this industry is made up of good people.” The ANA wrongly “staked out a position” they should not have by embracing Mandel, Kassan says he told Bob Liodice. On the other hand, “If you’re a CMO and your CEO sees an allegation in the press that agencies are getting rebates and undisclosed kickbacks, you’re going to insist on knowing whether your agencies are doing this.” He encouraged clients to do so. Agencies, he agreed, were not sufficiently transparent, particularly about digital ad purchases. “Media agencies began to create trading desks for online purchases of media. And they were doing it without fully disclosing the amount of online media they bought. They did this because they were buying in bulk and reselling and taking a principal position. They were not wrong. If I’m an agency and I say to you, ‘This