Media Buying Market Goes Grey and Clients Are Left in the Dark
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Kickback payments tied to U.S. media-agency deals are real and on the rise, according to Ad Age interviews with more than a dozen current and former media-agency executives, marketers’ auditors, media sellers and ad-tech vendors who said they’d either participated in such arrangements or had seen evidence of them. The murky practice — sometimes disguised as (undisclosed) “rebates” or bills for bogus services — is being motivated by shrinking agency fees and fueled by an increasingly convoluted and global digital marketplace. “It’s really ugly and crooked,” said one ad-tech executive who described receiving such requests.
Some arrangements go like this: A large media shop, poised to spend $1 million with that ad-tech executive’s firm to buy digital ads last year, asked for $200,000 to be routed back to the agency’s corporate sibling in Europe. The $200,000 would pay for a presentation or presentations by the sibling’s consultants. But these types of presentations aren’t worth a fraction of the price tag, according to numerous executives dealing with the same issue, who spoke on condition of anonymity for fear of losing business.
“It’s positioned as if this affiliate is going to do ‘media planning’ or ‘media optimization,’ but they do nothing and one never hears from them again,” the ad-tech executive said. “They just receive the check.” Another vendor said the same media shop asked something similar of him.
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