This article was published in 2026 and references a historical event from 2018, included here for context and accuracy.
- Tension: Advertisers trust agencies to act in their interest, but undisclosed kickbacks reveal those interests have long been misaligned.
- Noise: Industry talk of “transparency initiatives” drowns out the reality that structural conflicts of interest remain largely unresolved.
- Direct Message: When money flows in secret, trust becomes a liability — and the advertiser always pays the bill.
To learn more about our editorial approach, explore The Direct Message methodology.
Every industry has its open secrets. In digital advertising, one of the most enduring is that the agency hired to spend your budget may be quietly profiting from how it spends that budget.
In October 2018, the Association of National Advertisers confirmed that the FBI had contacted its outside legal counsel to request cooperation in a criminal investigation into U.S. media buying practices.
The probe, run jointly with the U.S. Attorney’s Office for the Southern District of New York, focused on whether agencies had collected undisclosed cash rebates from media vendors and steered clients into buys that served the agency’s financial interest rather than the advertiser’s.
The investigation had been building since a 2016 ANA-commissioned study by K2 Intelligence found that such practices were pervasive across the industry. It took two more years, and the issuance of federal subpoenas, before the matter became impossible to ignore.
What was an industry governance problem had become a law enforcement problem. The question worth asking today is whether anything has actually changed.
The contract that never said what everyone thought it said
At the center of the 2018 investigation was a deceptively simple disagreement: advertisers believed their agencies had a fiduciary duty to act in their best interests. Agencies believed they were obligated only to what was written in the contract.
In practice, those contracts often said very little about backend rebates, volume incentives, or the criteria agencies used when deciding where to place a client’s money.
This mismatch was not accidental. The K2 Intelligence report, which helped trigger the FBI’s interest, found that cash rebates from media companies to agencies were common in the U.S. market and rarely disclosed to the advertisers whose budgets generated them.
ANA’s own estimate put potential overcharges from non-transparent practices at between $680 million and $800 million over five years. That is not a rounding error. That is a structural feature of how the relationship was designed to work.
The advertiser-agency relationship carries an inherent imbalance. Agencies control information that clients cannot easily access: the actual rates negotiated, the volume thresholds that trigger rebates, the internal criteria used to evaluate one media buy over another.
When that information asymmetry is paired with undisclosed financial incentives, the result is a conflict of interest baked into the standard operating model of the industry.
Advertisers were not just getting bad advice. In many cases, they were paying for advice that was structurally designed to serve someone else.
How the transparency conversation became its own distraction
Following the 2016 K2 report and then the 2018 investigation, the industry responded with a wave of transparency commitments.
New contract frameworks were proposed. The ANA published guidance on what advertisers should ask their agencies to disclose. Trade bodies issued statements about the importance of honest dealing. Some advertisers did conduct audits and renegotiate their agreements. The story, as the industry told it, was one of course correction.
But the underlying economics did not change. The programmatic advertising ecosystem, which now accounts for the vast majority of digital display spending, introduced new layers of intermediaries, each with their own margin structures and limited obligation to explain them.
Global ad fraud losses are currently estimated to be at $250 billion. Non-optimized campaigns now see fraud rates nearly 15 times higher than those with active mitigation in place, according to Integral Ad Science’s 2025 Media Quality Report. The channels have multiplied. The opacity has deepened.
Meanwhile, the FBI investigation itself faded from public view without high-profile prosecutions or industry-wide structural reform. No major agency executive faced criminal charges. No new regulatory framework emerged to govern the relationship between advertisers and their media buyers.
The subpoenas went out, the lawyers got involved, and the industry moved on. What remained was the same fundamental arrangement, with a few more clauses in the standard contract and considerably more complexity in the supply chain through which the money flows.
What the money trail actually reveals
When an agency’s compensation depends on decisions it makes on your behalf, and those decisions are not fully disclosed, the relationship has a conflict of interest at its core.
This is not a problem that transparency initiatives can solve by themselves. Disclosure requirements help, but only if the party making the disclosure has an interest in being understood. Audits help, but only if the advertiser has the internal expertise to interpret what they find. Technology helps, but it introduces new intermediaries who may themselves benefit from opacity.
Cross-industry anti-fraud efforts saved U.S. advertisers an estimated $10.8 billion in 2023, which is a meaningful achievement. It also means that without those efforts, the losses would have been $10.8 billion higher. The fraud is not a historical artifact. It is the default state of the ecosystem without active countermeasures in place.
Choosing to look at the relationship clearly
The 2018 FBI investigation was significant not because it produced convictions or new laws, but because it confirmed in the starkest possible terms what many advertisers had suspected and few had been willing to confront directly.
When a federal law enforcement body begins issuing subpoenas to major holding companies over media buying practices, the problem is not a fringe issue. It is central to how the business operates.
For marketers managing significant media budgets today, the practical implication is straightforward. The advertiser-agency relationship requires active oversight, not deferred trust. That means contracts that specify disclosure requirements for any form of compensation tied to media placement decisions.
It means audits conducted by parties with no financial relationship to the agency being evaluated. It means developing enough internal literacy about programmatic supply chains to ask coherent questions about where the money goes and who benefits from the answer.
The industry has made genuine progress on some of these fronts since 2018. But progress coexists with continued structural incentives for non-disclosure.
The advertisers most likely to be protected are those who have decided the question of how their agencies are compensated is worth understanding in detail, not those who have accepted reassurance in place of information.
The FBI’s investigation was a signal. Whether that signal was received, and what was done with it, has varied considerably depending on who was listening.
