• Philippe Dominois

"Murky at Best, Fraudulent at Worst"

Updated: Nov 10, 2020

Advertisers Be Aware

When P&G's Marc Pritchard, owner of the world's largest advertising budget, describes the media supply chain as "murky at best, fraudulent at worst", it refers to the Dark Side of media agencies. And not many advertisers are fully aware of this Dark Side.

You might have heard of the media transparency issue, where media agencies receive undisclosed rebates from media owners, and media funds are used as "principal" to resell media inventory to advertisers with undisclosed markups.

This transparency issue leads to another issue, and that's media neutrality. If your media agency is incentivised by media owners with cash rebates, they will prefer to sell you media inventory which will maximise their profit margin, rather than delivering on your objectives. In other words, the media plans tend to be best for them, not for you.

And then, you have media price disparity. The same media inventory (let's say the same TV spot aimed at the same target audience) can be bought at a huge premium by an advertiser compared to another, all depending on the quality of their media agency contract and media processes. Best-in-class advertisers tend to get the best inventory, at a very competitive price, while smaller, less media savvy advertisers tend to get the worse inventory at a premium price. This is the reality today.