Media buying agencies in the age of Madison Avenue kickbacks
Over the past few weeks, we’ve shared a few posts on media buying and CPM campaigns and how to decode digital marketing jargon. In each post, we’ve mentioned that partnering with your local Orlando marketing agency can help you get better rates and ensure your ads are targeted in the right way when starting a new campaign. Today, we want to delve a little deeper into some of the serious reasons why it’s so important to partner with a trusted marketing agency before forging a new relationship with a media vendor.
I HAVE NO IDEA WHAT YOU’RE TALKING ABOUT, CATCH ME UP:
Last month, the Association of National Advertisers (ANA) released an investigative report on media buying firms that shook the trust of agency-client partnerships across the nation. Over the past seven months, the ANA has delved into whispers that media buying firms were accepting rebates and kickbacks as great as 20% from large, media supply corporations in exchange for placing their clients’ ads through designated outlets. Instead of championing their clients’ best interests, these firms fell prey to the same temptation that led commission-based financial analysts to ruin right before the recession in 2008.
In essence, media agencies would accept money from their clients intended for a media spend, and then receive a portion of that money back from their media supplier if they reached a certain volume of ad sales or placements. This encouraged media firms to sell more (perhaps unnecessary) ads and inflate the price of their placement services. To disguise this practice, media suppliers and agencies used a variety of convoluted schemes to diffuse the appearance of a direct kickback, including offshoring the rebate, hiding the supplier-to-agency price points, and more. To read the full ANA report, click here.
HOW TO HANDLE MEDIA BUYING MOVING FORWARD:
Despite being somewhat shocking (especially to the average consumer), this report shed light on a long-held industry suspicion and paved the way for reform. The ANA will begin making recommendations and contract restructuring mandates in the coming months that will limit this behavior and realign agencies with their clients by promoting transparency and punishing illegal incentive plans moving forward.
Major media buying houses have the opportunity to come forward with their own suggestions, and a healthy dialogue both refuting and supporting the investigation is underway. The conversation finally frees agencies big and small to address the issue head on and make changes that will support the growth of their agencies while protecting the customers.
Media buying has not slowed down… if anything, the importance of a strong digital advertising strategy is more defensible than ever before as more and more business shifts to the online channel. The solution isn’t shying away from media spends, but rather putting checks and balances in place that will protect our customers. It’s also important to educate businesses to do their due diligence before partnering with a media buying firm or trying to conduct media purchases on their own without skilled representation.
WHAT WE THINK ABOUT THE MEDIA BUYING SCANDAL:
As your Orlando digital marketing agency, we believe it is our duty to represent our clients’ interests. We have met our fair share of exemplary media suppliers and have asked the tough questions that help us forge partnerships with only the best suppliers and most direct vendors. As your agency, we stand behind this investigation and stand behind your needs as you continue to choose us to represent your media buying campaigns. We can, indeed, negotiate better rates and placement for our customers in many instances… but it is never at the expense of your trust.
If you are ever in doubt about your past media purchases or want to learn more about how we can protect you from this type of non-transparent business practice, reach out to our team for a comprehensive deep-dive into the gold-standard of media buying practices and the types of questions you should ask before your next paid media spend.
Together, we can do much more.