Written by
With the exponential growth in technology and the implications of that for the media industry, significant changes to the media landscape shaped by the duopoly of Google and Facebook are presenting media buying agencies with new challenges. Traditional advertising, along with traditional set commissions are being replaced by an increasing move towards digital advertising and incentives in the form of rebates-a highly debated and contentious current topic in the media world.
Arvind Hinkman writes in Adnews, “The Association of National Advertisers (ANA) commissioned report found pervasive media rebates and non-transparent business practices in the US media buying ecosystem, and that agencies made media planning decisions that were not always in the best interest of clients.
The US has strict laws banning media rebates, but in Australia the practice is legal provided there is full disclosure to clients.”
Competitive pressures are being placed upon media buying agencies where clients are driving down costs and agencies are positioned to have to look at alternative ways to create profit. In addition, they are receiving negative publicity for gaining from rebates and variable, unclear commission arrangements with media owners, as well as a lack of transparency with clients because of complex fee structures.
Adnews references the CEO of an independent agency who speaks about a “blame game” where much finger-pointing between agencies and clients around hidden agendas of the former and unreasonable demands from the latter result in the media buyers funding an unsustainable and “inherently unstable” system.
The CEO argues further that while clients should insist on transparency, they also need to know that their agency “is profitable and able to sustain itself long term”.
Teaching Scotwork courses I’ve observed many people are reluctant to share information, they hold the misconception that information is power and therefore best to keep it close to the chest.
Perhaps with more disclosure of information within the current media buying landscape they’d avoid the “smoke and mirrors” accusations and therefore the extent of negative publicity. Once more, being transparent with information will only build reciprocity and gain trust, both of which are critical for long term relationships.
