A probe by a US marketing trade group is set to reveal that US ad agencies are accepting rebates from media companies. As adland nervously waits, Bob Wootton looks at some likely consequences.
As I write this – on a plane back from doing two sessions at FEPE’s excellent 57th Global Congress in Barcelona, where the subject obviously reared its head – it seems we’re still all speculating as we eagerly anticipate something to emerge.
The volume and frequency of conflicting rumours is increasing, though as yet very few are in the know. Things are more or less following their natural order, with agency groups tending to diffuse and downplay while murmurs from the instigators and their agents are suggesting explosive revelations.
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The Americans have a record of pursuing things once they’ve really lifted a lid – think FIFA. Whatever, it’s now attracting the attention of the big boys. The Wall Street Journal, FT, Times and Bloomberg are all taking notice, the WSJ most recently claiming that practices will be outed – but no perpetrators named.
Others are suggesting lawyers have already been briefed. If there are revelations, I think it’s the clients’ reactions that are going to be the most interesting. It will be difficult for some not to get caught with some stain of complicity, whether internal or even legal. And if some agencies get into really hot water they could well play hardball and threaten to take their clients down with them.
Meanwhile, many media owners, even those with the strongest trading positions, actively dislike the status quo – in which they have allowed themselves to become overly-intermediated and have to ‘buy’ business by offering rebates to media buyers – and have a keen interest in disrupting it. In this context, the fact that many own news channels of record should concern agencies.
Will this inquiry trigger knock-ons in other markets, ours surely the next to come under scrutiny? If so, will our advertisers step up to the plate (I have my doubts) and how will our regulators react (judging by their recent intervention in the model agencies’ activities, they might well be keener than some would hope)?
But all eyes on the US for now…
Bob Wootton is founder and owner of Deconstruction, a media consultancy, and the former director of advertising and media at ISBA.
