What Clients are Saying About Media Rebates/Incentives

July 31, 2012

By Bill Duggan

ANA, along with our outside legal counsel Reed Smith, recently released the white paper “Media Rebates/Incentives Require Full Transparency.”

The industry practice of media companies providing rebates/incentives to agencies for referring or influencing client spending toward 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, our survey/white paper confirms that this practice also exists in the U.S. Here are some of the verbatim comments from the survey from clients about media rebates/incentives.

  • “This is a dark and murky area of our business that needs greater transparency and protective language in all contracts.”
  • “Media transparency is a huge issue.”
  • “The rebate practices and the new business of agency trading desks are eroding the client-agent relationship. I expect to see some agencies begin to compete, and win business based on transparency and trust.”
  • “Media placement costs are pass-through expenses. Via our master service agreements, we do not allow up charges of any type.”
  • “If this practice of rebates paid to agencies by media companies is going on, it is wrong in two ways: (1) it’s the client’s money and (2) it is influencing the decision on what is best for your business.”
  • “I am appalled by this practice. We ‘partner’ and trust in our media agencies to deliver the absolute best plans, and need them to have our best interest in mind. If I find that our media agency is taking incentives or rebates, they will no longer be buying media for us.”
  • “In this age of transparency and accountability it is hard to see how any agency could justify this behavior.”
  • “Our contracts include language requiring agencies to return any incentive/rebates they’ve achieved as a result of our business.”
  • “To utilize my spend to get a rebate or incentive that will go toward the agency’s bottom line seems to take away the unbiased selection of a media company and perhaps the agency not resulting in the best interest of my company.”
  • “Our contracts include language requiring agencies to return any incentive/rebates they’ve achieved as a result of our business. So, if the amount of business we are doing with the agency contributes to 30 percent of the total necessary to qualify them for a rebate/incentive, we expect the 30 percent rebate/incentive the agency receives to be given back to our company.”
  • “Managing this effectively means asking the questions. You must stay on top of this and not abdicate responsibility for your advertising plan.”

We’d appreciate hearing your perspective.

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