Media Perspective: Why backhanders are threatening media neutrality
A view from Jeremy Lee, jeremy.lee@haymarket.com

Media Perspective: Why backhanders are threatening media neutrality

It's been disappointing for seasoned agency/media owner spat enthusiasts that the traditional January headlines or chatter of the former pulling spend from the latter have not been prominent this year.

Rather, most deals apparently seem to have been concluded on time and - for those voyeurs with specialist tastes - with regrettably minimal amounts of pain.

Buying directors and their sales counterparts (well, those still with jobs) can therefore be stock prodded back into their cages until the next negotiation season.

So why the uncharacteristic haste? Anecdotally it could have something to do with the spectre of the Additional Volume Bonus (AVB) coming into widespread play and speeding up the negotiation process.

The payment of AVBs (otherwise known as incentives, sweeteners, kickbacks) by media owners to agencies is nothing new; it has been the UK outdoor industry's dirty little, but fairly open, secret for years, while it is standard practice in some European markets, particularly Spain and Italy.

It has been suggested that the 2011 negotiation season saw the importance of AVBs spread to other media, and their status in negotiations rise to unprecedented levels.

In practice, the AVB is part of the negotiation and usually takes the form of a cheque that it written back to the agency at the end of the year totally separate to any agency commission agreement. It is designed to encourage agencies to spend their clients' money on a particular channel; in its crudest sense, media owners are paying agencies for business in order to protect their share.

While it was all unpleasant and unspoken when it occurred in outdoor, they got away with it as the secret may have been dirty, but it was also little. However, if it has become widespread in television and print, then it could be worrying.

Firstly, where does this leave "media neutral planning" - once a fashionable mantra but now surely simply best practice for any agency? Well, who knows but generally it can hardly be in the rudest of health.

And what about the business ethics of taking kickbacks for spending clients' money where it is most financially expedient for agencies? Again, it doesn't look great when the IPA, among others, has done so much to try to convince advertisers that they are primarily business partners.

But then there's also the argument that advertisers must take responsibility for their part in constantly wanting to be able to show that they have, on paper at least, year-on-year cheaper media deals.

Ultimately, AVBs have to be seen in the round. But it's still a shame that agencies have had to come up with such arcane ways to make their money, rather than receiving a fair fee from their clients.

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