Agency Holding Company CEOs' Weeklong Chorus: No Inappropriate Rebates
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The topic of rebates infiltrated the largest agency companies’ first-quarter earnings calls this week following weeks of talk about the subject.
Former Mediacom CEO Jon Mandel sparked the discussion last month at meeting of the Association of National Advertisers, where he alleged that U.S. media agencies were collecting rebates from vendors without disclosing them to clients or passing along the benefits. The powerful media agency network GroupM quickly said its agencies do no such thing, Ad Age later published an in-depth look into the subject and Pivotal Research Senior Analyst Brian Wieser last week downgraded IPG to hold from buy and Omnicom, Publicis and WPP to sell from hold, citing the negative attention.
But this week the global agency holding companies publicly joined the conversation. WPP, Publicis, Omnicom and Interpublic denied having anything to do with U.S. rebates, saying they comply with client contracts prohibiting rebates in the U.S.
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