COLOGNE \u2013 After more than a year and innumerable reports and headlines, WPP CEO Sir Martin Sorrell still doesn\u2019t understand the genesis of widespread commentary about agency-client transparency in the United States. He says those who are worried about transparency should take a look at the Middle East, Japan and China.<\/p>\n
\u201cIt\u2019s unfortunate what has happened. What happened with the ANA last year, for reasons that I don\u2019t really understand to this day\u2026reports issued, full of innuendo but no fact,\u201d Sorrell says in this interview with Beet.TV at the DMEXCO<\/a> advertising and media trade show.<\/p>\n \u201cWhat it\u2019s done is create a different atmosphere which I don\u2019t think has been helpful.\u201d<\/p>\n Just over a year ag,o the Association of National Advertisers issued a report that roiled the waters of the advertising and media agency world. It concluded that some agencies had routinely padded their profits by using such non-transparent practices as taking rebates from media sellers.<\/p>\n To Sorrell, those accusations consisted of \u201caspersions which I think are totally unjustified, or certainly from what we\u2019ve seen.\u201d<\/p>\n He doesn\u2019t cite specifics about the Middle East except to say that people are \u201cexamining the entrails.\u201d For Japan he seems to be referencing the overcharging scandal that engulfed a major ad agency in September of 2016 after one of its biggest clients suspected something was amiss in its digital media buys.<\/p>\n Sorrell says a WPP client in China asked it to audit several state-owned enterprises (SOE\u2019s) \u201con the media front because we didn\u2019t use brokers in China, where there was let\u2019s say a fog around the operations. We were asked to look at one of the areas of potential corruption advertising billings. In China there\u2019s opacity in relation to the supply chain.\u201d<\/p>\n Sorrell believes the transparency issue is of relatively minor importance in the U.S. market \u201cwhere there are no rebates and relatively more important in markets like Japan, where I think it\u2019s true to say there\u2019s still total opacity on what the price of a TV spot is. It\u2019s totally unknown as to what many of our clients are paying for their spots.\u201d<\/p>\n Addressing the transformation that has swept the advertising and media industries\u2014totally reshaping how clients and agencies interact\u2014Sorrell lists three areas that stand out.<\/p>\n Media and data: GroupM and Kantar each represent 25% of WPP\u2019s business.<\/p>\n The growing importance of digital agencies of record: \u201cDigital agencies going into clients through the digital door and then expanding above the line.\u201d<\/p>\n The \u201cveritable explosion\u201d of production platforms: Among them WPP\u2019s Hogarth Worldwide<\/a> that enable marketers to \u201cpull down their marketing assets effectively without reproducing them and reinventing the wheel in every market.\u201d<\/p>\n