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.