The Transparency Controversy: Rebates and Language

AdAge headlined their first report amp8220Advertisers and agencies far apart amp8230amp8221 and quoted Ana Jernestaal Assistant VP Finance for L39Oreal USA as follows amp8220We know rebates exist but we39re sitting across the table from advertising agencies that are flatly denying itamp8221There is much to discuss even in those 18 words First the quote comes from a financial person not a marketing person This in itself is interesting as an illustration that the client conversation has moved from marketing into financial management Second the use of the word amp8220rebateamp8221 third the use of the word amp8220advertisingamp8221As the debate intensifies and moves away from its natural home in marketing services so lessinformed departments begin to get involved As someone once said a little knowledge is a dangerous thing especially if youamp8217re an agencySome clarity is needed beginning by accepting that the fundamental issue is less about whether rebates exist of course they do and more about what happens to them In short the discussion should really be about transparency as opposed to an arcane argument about how the media marketplace worksFurther the principles of fairness and transparency should work both ways Certainly the agencies are guilty of not being clear and retaining sums from vendors that should be returned to those whose budgets generate them But itamp8217s also the case that advertisers have imposed conditions like late payment terms that may conceivably be slightlylessthantotallyunacceptable in some circumstances but are not in any way reasonable given the commitments that need to be made to secure premium media inventoryThe ANA also heard from the main man Irwin Gotlieb Chairman of GroupM Irwin has been around even longer than me which is saying something Heamp8217s been ahead of almost every trend in short heamp8217s had a remarkable career Significantly Irwin cut his teeth on Procter and Gamble Anyone lucky enough to have done that has amp8220doing the best for the clientamp8221 as part of his DNAOf course we all know we all live in very different times not least the shortterm marketdriven demands of the holding companies on operating units including the media agencies But certain principles still pertainKey amongst those is doing the right thing by the client As earlier Cog Blogs have said over and over again an important element in doing the right thing is the sanctity of the plan Plans are written to drive the clientamp8217s business There is no better example of how agencies put their own interests first than the practice of putting the buy ahead of the planOr as Irwin put it quotI think at times we39ve stepped on each other a little bit We39ve extracted results for ourselves on the back of someone else39s activity And I think we do need to get better about that amp8230 When we talk to our staff we remind them constantly that they39re acting in the best interests of their clientsamp8221In a sense the furor over what does or doesnamp8217t happen in the US is less important than the agencies putting their global houses in order GroupM in the US for example must squirm at the activities of a GroupM agency in Australia and to be fair they have acted on that situation but misdemeanors keep popping up all over the place and in all sorts of agenciesGiven the scale and sophistication of global advertisers and the importance they put on professional behaviors and standards it is urgent that the holding companies start imposing similarly high standards on their buying operationsThey might start by stressing that the buyeramp8217s job is to buy the plan Itamp8217s not the planneramp8217s role to justify a buy made to benefit the agency ahead of the clientThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of Media Village management or associated bloggers Image at top courtesy of freedigitalphotosnetamp160amp160

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The Transparency Controversy: Rebates and Language

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Brian Jacobs

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The Transparency Controversy: Rebates and Language

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