Do Media Rebates/Incentives Impact Smaller Advertisers More?

August 16, 2012

By Bill Duggan

ANA has received lots of feedback and comments on our recently released white paper, “Media Rebates/Incentives Require Full Transparency.”

Following a suggestion made by Brian Wieser of Pivotal Research, we looked at awareness of media rebates based on advertiser size of our survey respondents.  The results are quite interesting.  

  • Of the survey respondents ranked among the Ad Age top 100 advertisers, 19% are aware of rebates in the U.S.
  • Of the respondents ranked outside the Ad Age top 100, 30%, are aware of rebates in the U.S.

This would suggest that smaller advertisers are more likely to be aware of rebates in the U.S. than larger advertisers.

When we shared this data with Brian, he said, “This makes a lot of sense.  I would actually assume that rebates impact smaller advertisers more.  That certainly is the case outside the U.S. as far as I’m aware.  Usually this is because they are less sophisticated or have less clout with their agencies.  I understand that in many instances outside the U.S. where the AVBs exist and there is a global client, all of the AVBs flow back to the larger advertisers (who may then in turn pay a fee for services) but the smaller ones don’t get anything back.  This also might explain why we don’t hear much about AVBs in the U.S.  If the AVBs are, for example, concentrated among smaller and often privately held media owners and the advertiser base that effectively supports those AVBs are those who work with smaller and privately held agencies, which would explain why we don’t see them in the public holding companies.”

Thank you, Brian, for those thoughts.  Our white paper suggested that (1) the entire benefit of media rebates belongs to the marketer, and agencies need to be completely transparent regarding any rebates received and (2) marketers should have clear language in their agency contracts specifying how whatever form of rebate made on their business will be handled or allocated.

We welcome input from others!






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