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Media Kickbacks and Rebates?

June 24th, 2016

The Upfront section of the June 13th issue of AdWeek has brought to light an issue that has perplexed me for nearly 20 years. The article discusses the recent ANA eight-month study focusing on media buying practices. The study has highlighted some “disconnects” between media buying organizations and their clients. One of the major concerns addressed is the fact that many media buying organizations regularly receive kickbacks and rebates from the media as an incentive to buy. From what I’ve observed, as unethical as this practice seems to me, it should come as no surprise since those who partake of such ill-gotten gains are in no way trying to hide the fact.

I have heard stories of media buyers given elaborate “gifts” from the media vehicles they buy and that has always been a mystery to me. I have always worked for ad agencies that would dismiss anyone who accepted anything more than a generous holiday lunch or an occasional platter of cookies.

On more than one occasion, I have been stunned by stories of broadcast executives inviting a media buyer and their entire family on an elaborate cruise. I have always wondered how a buyer can claim impartiality under those circumstances. It is such a huge conflict of interest.

A few years ago, we won a sizeable media account. They came to us because their former agency was posting at about 75% on average and they wanted to push that up into the high 90’s. One day during the transition, they mentioned in passing that they were getting sick of visiting their former media buyer and seeing all of the photos of the various cruises she’d been on – as a result of their media spending.

My only real question is, how has this gone unchecked for so long?

One Comment

  1. Not totally germane, but I was reminded of the 50’s payola scandals… now, we’re told, “No, not never, ever agin, gonna happen!” Yep.
    My late Dad, Ray Olson of WOW radio & TV, as program director,
    told about many inappropriate gift offers to himself & assoc’s.
    Of course, (WOW owner) Meredith Publ. policies forbade all but small, usually holiday-time gifts.
    Around 1953, my parents quit cig’s, cold turkey, & succeeded.

    The Devil Incarnate, “Bull Durham,” must have learned of their unaffectionate defection, & about 2 wks after they quit, a carton of Lucky Strikes came to our home every week!
    My folks would give the mail man
    those cartons of packs, who probably promptly pursued emphysema (btw, that was cause of demise of Dad’s most famous hire, John Carson [initial sched’s listed as that… ‘Johnny’ came later… er, lately] ).
    ——-
    Back to your subject: I presume this problem is not yet a matter of federal regulation, although I do know the FTC and other anagrammatical autocrats are always ready to ‘assist’ you in your attempts at survival.
    I, too, was blessed with such
    well-meaning regulation, as a pathologist at Nebr. Meth. Hosp., & CMH… Medicare’s wiring diagram is best vizualized as an explosion in a spaghetti factory…
    “Waya PASTA repaira!”
    Have a good week!
    Dan R. Olson, MD (ret’d ’09)

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