Why the 4A's Has Formed Task Force On Media Rebates
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The American Association of Advertising Agencies, whose members produce roughly 80% of advertising volume nationwide, naturally becomes alarmed when a matter threatens the very trust that defines the bedrock of the agency-client relationship. That issue is media rebates and, more specifically, what detractors derogatorily term “kickbacks” on Madison Avenue.
A former cable TV executive triggered the clamor this spring, claiming that rebates are widespread in advertising. A subsequent survey by Ebiquity and a sibling marketing analytics firm contributed. In it, 62% of advertising procurement officers polled said they consider rebates a “hot topic” within their company, and 63% said they are “moderately” or “extremely pressured” annually to lower agency compensation.
While rumors and innuendo have exaggerated the matter, the hubbub it sparked offers the opportunity to explore the issue of how advertising is bought and sold and related performance metrics.
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