What Do You Think: Are Media-Agency Rebates and Kickbacks a Reality?

And Even if They Are, Is It Just Part of Doing Business?

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Former Mediacom CEO Jon Mandel set off a firestorm at the Association of National Advertisers Media Leadership Conference two weeks ago when he claimed that undisclosed rebates to media agencies are far more widespread in the U.S. than generally thought. In fact, he said it was one of the things that caused him to leave the agency business.

Media agencies aren't living up to their fiduciary duties to clients and "cross the line of acceptable conduct in a partnership," Mr. Mandel said. "They are not transparent about their actions. They recommend or implement media that is off strategy or off target if it works for their financial gain."

Rob Norman, the CEO of GroupM, which includes Mediacom, MEC, Mindshare and Maxus, responded that his company takes no part in such schemes. And the ANA has walked back the charges somewhat.

But the ANA also said it will "continue to investigate and work to bring greater understanding to the media marketplace regarding transparency concerns." And some industry insiders responded to Mr. Mandel's claims with a resounding lack of surprise.

So what do you think?

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