Five Major Holding Companies Cleared in DOJ Investigation

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According to AdAge and Adweek, the Department of Justice closed its two year investigation into video production and post-production practices against five of the largest ad agency holding companies – IPG, MDC Partners, Omnicom, Publicis and WPP.

Apparently the DOJ has declined to comment on the status of its investigation which focused on whether ad agencies were awarding production business to their in-house departments over third-party providers in a ‘rigged bidding’ process.

The DOJ is still investigating media buying practices among the agencies, driven by the ANA K2 report citing serious problems that went against best practices and agency-client contracts.

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UPDATE – Media Trading Practices Under FBI Scrutiny

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According to Ad Age, the FBI has turned to the Association of National Advertisers (ANA) and its members for cooperation with an ongoing “criminal investigation into media buying practices” of service providers.

There are a number of global media buying agencies caught up in the probe, but no word on larger local players being part of the investigation.

The FBI investigation was likely the result of the ANA’s own investigation amid complaints from members about transparency and contract compliance issues on the part of media buyers and the media suppliers.

The ANA probe resulted in the issuance of a K2 report in 2016 which supported member claims of some agencies withholding cash rebates from clients as well as other transparency issues, and a new, highly detailed, media contract template as well as best practices. While media buying practices and contract terms can vary by country, problems identified in the K2 report were not limited to international markets.

ANA members are encouraged to contact the organization’s lead counsel, Reed Smith, which serves as interface between the ANA and FBI, if they believe their media agency relationships warrant further scrutiny.

There is no indication at this time as to when the FBI investigation will be completed.

 

Bajkowski + Partners LLC is a leading consultancy providing services to marketing and procurement teams including building in-house media planning and programmatic as well as in-house creative and production operations. For more information, please visit our website.

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Agency Search: MedStar Health Selects Doner as AOR

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From AdAge by on : “MedStar Health, a healthcare provider in the Maryland and D.C. region, has picked MDC Partners’ Doner as its agency of record. The agency will oversee strategy, creative and production for the provider, which has 10 hospitals, a home health agency and more than 300 urgent care, physician practice and other care sites. The company previously worked with AB&C Creative Intelligence. Bajkowski & Partners led the search.”

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State Sales Tax Coming to Your Favorite eTailer

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According to eMarketer, the US Supreme Court struck down a 26 year old law last week that permitted pure play online retailers to avoid charging sales tax if they weren’t physically operating from that state.

With online sales forecast to grow six points from 10% of all retail sales to 16% by yearend, or more than $525 billion in sales, traditional retailers have felt at a competitive disadvantage against etailers for the past two decades.

On the flip side, online merchants have argued that having to manage tax collection for 45 states would be unduly burdensome for small etailers.

Will this move truly level the playing field and drive people back to bricks and mortar shopping for purchases they’ve shifted to online? Probably not.

For more details on the court’s ruling and implications, visit eMarketer.

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