Ritson: Why doesn't every marketer insist on a Parramatta Clause to protect themselves from principal media? |
Back in 2015, in a Florida ballroom, a retired media agency boss named Jon Mandel stood up in front of America’s biggest advertisers and said the quiet part out loud.
Kickbacks, the former MediaCom CEO told the Association of National Advertisers conference, were everywhere. Legion. Agencies were being paid by the very media they were supposed to be buying impartially. And because they weren’t declaring it to the client who funded the deal, there was an obvious conflict. The media deal was producing the kickback, but was the kickback the reason the agency went for that specific medium and that specific deal?
The industry gasped, denied everything, and went back to work.
So the ANA sent K2 Intelligence in to investigate, and after interviews with 150 insiders (every single one demanding anonymity, which in itself tells you something) its 2016 report confirmed that Mandel had not been exaggerating. Non-transparent practices were “pervasive” across the American media supply chain. Cash rebates tied to client spend. Free inventory handed over as a volume reward. And a second trick built on top of the first: agencies taking the kickbacks, then selling the kickbacks on to their own clients, with nothing disclosed at either end of the deal.
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At the time the Australian media scene watched with detached involvement. It wasn’t them. It wasn’t here. And it wasn’t something anyone here wanted to get into. By and large things carried on as normal. But on Wednesday, everything came rushing back. The reason? Not an inappropriately direct Australian media executive, or a bold CMO, or trade body. It came from a procurement team in........