Media Rebates/Incentives Require Full Transparency
July 16, 2012
The industry practice of media companies providing rebates/incentives to agencies for referring or influencing client spending towards that media company, and then the agencies not reimbursing those funds to the client, has long been acknowledged as a common practice outside the United States. However, a recent ANA/Reed Smith survey confirms that this practice also exists in the U.S. Details and implications for advertisers follow.
Background
From late May to mid-June 2012, ANA members were surveyed to uncover:
- Awareness among advertisers of media companies providing incentives to agencies for referring client spending towards that media company.
- The specific media involved.
- Whether clients have language in their media agency contracts that addresses incentives.
- Whether clients conduct periodic audits to ensure that undisclosed rebate/incentive activity is not occurring with their agency.
One hundred eighty-eight members responded to the survey.
Table of Contents
- Awareness of Rebates/Incentives
- Media Where Incentives Are Most Likely
- Marketers Believe Agencies Should Not Keep Rebate/Incentive Dollars, and Doing So Damages Objectivity
- Contract Language
- Auditing
- Consideration of Media Rebates/Incentives in Overall U.S. Media Management Plans
- WFA Survey
- Implications
- Auditing is Advised
- Suggested Contract Language
- Appendix
(Please see our "Also See" section to the right for the full PDF of this white paper.)
Source
"Media Rebates/Incentives Require Full Transparency." ANA/Reed Smith. July 2012.
