Unethical Behaviour in US Media Agencies? – Brian Jacobs

So it was and is with the US ad industryamp8217s denial that anything untoward is happening and has ever happened between the media agencies and the media vendors that could possibly lead to the agencies using client budgets to benefit them the agencies as opposed to the advertiser And then up popped Jon Mandel ex CEO of Mediacom in the USA Mandelamp8217s comments at the ANA event a couple of weeks ago have put the cat amongst the pigeons The flapping has indeed generated something of a mighty wind and you suspect that no amount of amp8220move along thereamp8217s nothing to see hereamp8221 will workSimply now that one of Americaamp8217s own has stood up and said amp8216amp8216hereamp8217s whatamp8217s been going onamp8221 things will never be the same againTo make the point Advertising Age last week ran an online poll on Mandelamp8217s claims 84 answered amp8220yesamp8221 to the question amp8220Do you believe that US media agencies are receiving rebates from media sellers and vendors that they don39t disclose or pass on to clientsamp8221 74 said they considered this to be unethicalThere are a few questions that the amp8220nothing to see hereamp8221 brigade need to considerFirst no one questions that these practices happen in many many nonUS markets No one questions that the agencies have been the beneficiaries Now if a tactic works well for you in countries A B and C wouldnamp8217t you be tempted to try it in the biggest ad market of them all Especially if someone at your holding company HQ is asking you why you canamp8217t do what those smart people in countries A B and C doNext US agencies have always been focussed more on the buy than the plan Look at the upfront system pretty well unique to the US which was designed to allow agencies to acquire limited premium TV inventory on what was originally three networks and which inevitably involved agencies perming two from three TV buys drove that system not TV plans The buy came first which when you consider the complexity of the US TV market was not altogether surprisingItamp8217s a short step from there to making money on the buysFinally why on earth would Jon Mandel make this up and not just him but the people in agencies that he claims to have interviewed And if what he had to say was so transparently rubbish why would the ANA give him a platform to say it Never mind that the ANA has rowed back from suggesting that every agency is up to no good which is not what Jon said in the first place never mind that Procter and Gamble said amp8220we trust our agenciesamp8221 subtext if anyone tries this stuff with us theyamp8217re toast and never mind that GroupM came barrelling in to deny everything no one to my knowledge has accused them specifically of anything The evidence points towards the fact that it is certainly not unknown for agencies to put buys that benefit them before plans designed to benefit their clients and they shouldnamp8217t do itIn Nick Daviesamp8217 brilliant account of the News International as then was phone hacking scandal amp8220Hack Attackamp8221 he tracks how the practice of phone hacking became endemic at The News of the World There were many fine journalists there but this underhand behaviour took hold and simply became the normI was reminded of this when reading Mumbrellaamp8217s account of how the media agencies resell free spots via their value banks in Australia Mediacom and Aegis were caught doing this people lost their jobs and GroupM to its credit is investigating Mediacom All that Mediacomamp8217s and Aegisamp8217 staff were doing was something that has become the norm throughout much of the industry and by no means just in AustraliaThose who followed the phone hacking scandal will recall that The News of the Worldamp8217s initial defence was that hacking was a tactic used only by a rogue journalist Clive Goodman and that it was not commonplace within the newsroom Except it turns out that it was Eventually The News of the World closed James Murdoch and it seems likely Rebekah Brooks were hauled off to the USA whilst Andy Coulson who had moved from being Editor at The News of the World to a role as David Cameronamp8217s media spokesman amongst others went to prison News Internationalamp8217s bid for control of BSkyB which would have been amongst the biggest media deals of all time collapsed in the wake of the scandalThe agencies need to clean up their act and fast to stop all the good work done by the majority being undermined by the greed of the few As Warren Buffett said amp8220It takes 20 years to build a reputation and five minutes to ruin it If you think about that you39ll do things differentlyamp8221Brian Jacobs spent over 35 years in advertising media and research agencies including spells at Leo Burnett UK EMEA International Media Director Carat International Managing Director Universal McCann EMEA Director and Millward Brown EVP Global Media He has worked in the UK EMEA and globally out of the USA His experience covers shifts from fullservice ad agencies to media agencies from traditional singlecommercialchannel TV to multifaceted digital channels and from media planning to multidisciplinary communication planning Brian can be reached at brianbjandacomRead all Brian Jacobs39 MediaBizBloggers commentaries at The Cog BlogCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates at MediaBizBloggerThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries

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Unethical Behaviour in US Media Agencies? – Brian Jacobs

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From Fragmentation to Flow - By E.B. Moss

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