Media Perspective: Signing-on fee is the wrong solution to remuneration poser

There have been some extreme public outbursts in recent days. Both Mel Gibson and Paul Gascoigne hit the headlines after making ill-judged remarks.

And while Gascoigne's "Moaty, it's Gazza" rant on the radio station Real Radio was significantly less offensive than Gibson's reported remarks, it brought the troubled footballer acres of ridicule and unwanted attention.

And Campaign readers seemed to enter into this spirit, posting online after reading our story about Thomas Cook demanding a signing-on fee from the agency it selects to handle its media planning and buying account. Perhaps it was the weather that helped to stir emotion on this one, because feelings have been running high.

Opinion is not all against the Redknapps' travel agency of choice. James Kydd, the former Virgin Media client, uses this week's Campaign letters page (p22) to provide a spirited counter-argument against those who have slammed the travel company, essentially positing that agencies have brought this situation on themselves for being less than open with their clients.

And some of the pitching agencies are inclined to be sympathetic. One agency chief says that clients, via procurement, have a "highly evolved understanding" of the ways in which agencies make money and have simply come to "understand the value of their contracts".

The problem I have with this argument is that Thomas Cook runs the danger of endorsing, perhaps unintentionally, a murky and opaque world where agencies collect their wedge in the form of undeclared kick-backs from media owners. It seems to me like saying: "We know this happens so just take the media owner discounts; we've already had compensation up front." It's a solution but a very clumsy one.

Let's be clear, though, that agencies shoulder some responsibility. It's five years since Interpublic moved to repay some $250 million in "volume and cash discounts" to clients of Universal McCann and Initiative in Europe. IPG was more open than some of its competitors in doing this but, if anything, I reckon Thomas Cook's actions will make agencies more inclined to push media owners for greater levels of this discount to compensate for these so-called "signing-on" fees.

Surely it would be fairer and more transparent for clients to pay a sufficient fee to agencies so that they don't have to resort to back-door methods? It was encouraging to see the pitch criticised by the IPA and it will be interesting to see if the IPA Action Group lives up to its name and can work with ISBA towards a more transparent and sympathetic solution.

Sitting down and talking it over, perhaps over some lager and chicken, would seem preferable to a stand-off with violence simmering beneath the surface. Let's hope the trade bodies can deliver.

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