It had to happen sooner or later. After weeks of negative stories around media agencies, rebates and the rest, many of which demonstrate that if you\u2019re an agency it is indeed possible to shoot yourself in the foot whilst the foot in question is firmly lodged in your mouth, one or two rocks have been lobbed back towards those doing the bashing.<\/p>\n
First, in the US my fellow Mediabizblogger Steve Grubbs<\/a> posted: \u201cWe need the ref to blow the whistle and call no more piling on the media agencies over business practices and cost transparency. Our industry loves a good public flogging every now and then, but enough already. You\u2019d think that marketers were helpless little old ladies being swindled out of their life savings by those evil, conniving media agencies.\u201d<\/p>\n Then Josh Krichefski, COO at MediaCom UK wrote in \u2018Campaign\u2019: \u201cAny agency that recommends one channel over another for commercial gain is na\u00efve. Our clients are well-informed and they scrutinise our plans and what those plans achieve.\u201d I expect Josh is happy he has no responsibility for his agency\u2019s Australian office whose behaviour<\/a> he would no doubt describe as \u2018na\u00efve\u2019.<\/p>\n It is easy to get carried away, and to accuse media agencies of every sin. Such an accusation is clearly factually inaccurate as those same agencies know full well that every sin has already been accounted for by client procurement officers. But the agencies seem intent on self-harm, if not self-destruction. Consider the following questions.<\/p>\n \u2022 Why is it acceptable for agencies to demand rebates generated by their clients\u2019 budgets for themselves (interestingly a consultant with no particular axe to grind pointed out to me last week that the sales side of the business reports to him that agencies demanding unofficial rebates have never been more blatant in their demands)?<\/p>\n \u2022 Why is it alright to write a plan, and then to buy something else on the back of agency deals?<\/p>\n \u2022 Why is it acceptable to even try to write into clients\u2019 contracts that the agency will not agree to any form of media audit?<\/p>\n \u2022 Why is it alright for a digital trading desk to buy from a business owned by its holding company, and then to refuse to reveal where it has spent its clients\u2019 money?<\/p>\n Steve Grubbs argues that clients need to be responsible for looking after their own budgets. True \u2013 but if you hire a respectable media agency surely it\u2019s not unreasonable to expect that the agency will provide you with unbiased advice? After all that\u2019s what you\u2019re paying them for, isn\u2019t it?<\/p>\n Here\u2019s what one advertiser quoted in \u2018The Wall Street Journal\u2019 had to say about online advertising fraud and unbiased advice on Monday last week: \u201cIf the entire industry knows fraud exists and plenty of companies claim they have technologies capable of addressing it, why does it persist? Mr. Rupczynski (from Kraft Foods) is among those who say members of the online ad supply chain pay lip-service to the problem but ultimately continue to ignore it because it suits their businesses to do so\u201d.<\/p>\n Josh says his clients are well-informed and look carefully at every plan. This is a cynical defence. In effect he\u2019s saying \u2018we\u2019ll get away with what we can, and hope we\u2019re not spotted. And if we are accused of wrong-doing we\u2019ll just blame the client for not being well-enough informed to stop us\u2019.<\/p>\n There\u2019s another defence, much in evidence at the moment. This involves a shake of the head, a wry smile and the words \u2018it\u2019s always been like this\u2019. Even if agency deals have been around for many years they weren\u2019t right then and they\u2019re not right now. The fact that some dodgy practices have been around for years doesn\u2019t make them OK. They don\u2019t somehow mellow with age, and become acceptable. They\u2019re not Johnny Rotten for goodness sake.<\/p>\n The truth is that no-one talked about such practices way back when, so they weren\u2019t ever subjected to critical examination. Now they are. That\u2019s the bloody internet for you!<\/p>\n One of the most damning recent criticisms of the agencies, and one that has largely gone unanswered, is that they bend plans to fit their own objectives. This is dishonest; and it betrays trust.<\/p>\n Furthermore, this lack of trust potentially damages the agency holding groups. This week, a well-respected US analyst, Brian Wieser from Pivotal Research<\/a> downgraded his ratings for WPP, IPG, Omnicom and Publicis. Here\u2019s what he said: \u201cRightly or wrongly, there is a growing perception among marketers that agencies have been misleading, transferring value associated with media volumes without clients\u2019 full understanding or support\u2026 As…more specific allegations come to light, a drumbeat of negativity will build around the sector over the course of this year….Given this risk, we\u2019d recommend that investors move to the sidelines or exit the sector altogether while it all plays out.\u201d<\/p>\n Investors duly reacted, and many of the stocks dipped. We\u2019ll have to wait and see whether that dip is merely a short-term hiccup.<\/p>\n