Media agencies defrauding clients by asking for kickbacks to recommend software, says Salesforce boss
One of Australia’s most senior software sales executives has claimed the behaviour of Australian media agencies is verging on “fraud” in asking for kickbacks in exchange for recommending its products to clients.
In a public post on LinkedIn Kevin Doyle, Salesforce’s director of advertising technology, claimed local agencies had asked him twice in the past month for “referral fees” in exchange for signing up clients to Salesforce’s data management platform.
Doyle said in the post that unlike Salesforce, other “huge” advertising technology and marketing technology companies do pay agencies such “kickbacks”.
He wrote:
25%…is that all? Last i heard Facebook was +40% rebate.
Surely this headline could have read “Two media agencies defrauding clients by asking for kickbacks to recommend software, says Salesforce boss” rather than insinuating all of them are as corrupt as the couple involved?
Even better – name them so others aren’t implicated
You can definitely count (edited by Mumbrella for legal reasons) as one of them. Doggiest one of them all, they only haven’t been caught yet.
Surely everyone knows that is the entire culture of media agencies. The ‘ONLY’ reason that businesses use media agencies is so that internal marketing managers are void of responsibility and can blame an agency when something goes wrong. There is no real objectivity or looking after the interest of the client, the only thing they are interested in is who is giving them the biggest commissions and kickbacks. You should see how much the large media conglomerates award agencies for their clients business, it’s blatant bribery!
Hopefully a surprise to nobody. Nice one Salesforce and Kevin Doyle for calling it out, name and shaming would be fun.
So Salesforce has an issue with agency commissions, yet its partner relationships program is effectively a similar financial situation.
Have a look at that here, specifically the revenue sharing section – https://partners.salesforce.com/s/ISVPartnerProgramGuidePY2018.pdf
Not the same. ISVs in the software world build their business on a specific software platform. They are public about this, as the underlying software dictates what the ISVs software does.
Very different than an Agnostic Consultant recommending a media channel or piece of kit, whilst being influenced by monetary incentives from the seller.
https://en.m.wikipedia.org/wiki/Independent_software_vendor
I disagree with this assertion. The incumbent platform is irrelevant and developers/consultancies etc represent more than one vendor. Revenue sharing is an inducement. A developer/consultancy will most certainly be favourable towards one vendors product over the other (i.e to go with SF marketing cloud over Oracle marketing cloud) if the financial incentive is there and there is feature parity between the two.
What if there isn’t feature parity?
Will the agency still recommend the ‘better’ one at zero commission, over the ‘lesser’ one at 40%?
The specifics of the conversation are important here. Calling something a kickback is emotive and a genuine kickback is dodgy as and shouldn’t be condoned. But if the conversation was more around being something akin to a channel partner, then the “kickback” moves to more of a commission and if that is made transparent to a client then perfectly reasonable. The agency is making a recommendation based on a deeper understanding of the client, strong relationships and if it benefits the client (and it surely benefits salesforce) that has some value which should be recompensed.
Is it just me or has Mumbrella become the tabloid for advertising news? Entertaining and shallow like the Daily Mail.
I wouldn’t liken Mumbrella to The Mail. More to a respectable producer of ‘real news’. Sometimes the truth hurts. Kickbacks are still rife in the big media agencies. Pop along to Melbourne Cup day in the birdcage and see who is wining and dining who………
SFDC offer rebates and commissions. What is he talking about? They’re just at a higher level than the individual agencies.
I find this hilarious. This is the same Salesforce that said ‘you can’t be a marketing cloud partner unless you give us 3 new clients’. Extremely large and expensive Glasses houses!
The great thing about this is that those media agencies were probably using Salesforce themselves, considering the fuckers have a rebate function built into the software: https://success.salesforce.com/answers?id=90630000000h1vmAAA
If you want to do rebates properly, use the app Salesforce designed for them: https://appexchange.salesforce.com/listingDetail?listingId=a0N300000016aiZEAQ
media agencies aren’t agnostic. they aren’t even an ‘agent’ when it comes down to it.
will leave this here
https://www.salesforce.com/au/company/news-press/press-releases/2013/06/130614.jsp
Happens in the commercial CMS space as well. Many of the big CMS suppliers offer kick-backs and invoice loading to reward agencies and consulting firms for sending clients their way. If you’re building a website go open source and save a bucket (Drupal for larger sites, WordPress for smaller, invest in customisation and bespoke functionality and own the IP). Similar up-front cost with no ongoing licensing fees.
and more from salesforce
https://partners.salesforce.com/s/Salesforce_Consulting_and_ISV_Program_Policies_PY18.pdf
“Partners are eligible to receive 10% payout for First Year Net Revenue if a Qualified Lead is submitted prior to the Opportunity close date.”
… as long as you are a partner (ie. have paid to be a partner and refer x amount of business) and have conducted 50% of the sale process.
What an odd statement from Kevin Doyle given the above is freely available and the Salesforce business was built on aggressive referrals. Also especially odd seeing Salesforce and Krux desperately tried to get to clients via agencies and still do.
I’d wager $100 that a statement from Salesforce that apologises and/or censures the employee will be forthcoming in the next 24 hours.
Well done Kevin Doyle and Salesforce for calling this out! Most agencies are straight arrows, but for those who are not it is refreshing to see leadership coming from the tech industry.
We recently discovered this was the case with our agency recommending Adobe, despite the fact that nothing else we had was Adobe nor worked with Adobe.
They are no longer our agency, and we will never be inviting Adobe to an RFP again.
Amen to this, Adobe and their aggressive, heavy handed tactics to agencies and clients as of late has been ridiculous, pushing false promises of insights and API’s when really they just want to sell in Tube Mogul.
A real shame.
You go girl!
Sounds very similar to using a mortgage broker. You pay the broker for sourcing the best solution to your problem, they generally know the options well, have done the research on it and are well placed to advise a solution.
The client (home buyer) can go and do their own research but they’ve made the choice to outsource it to an agency. Agencies have a lot to answer for with transparency but if the rebate was fair, open and clear (like a mortgage broker should be), then it seems reasonable.
As a client, I always ask the question – are you getting any financial benefit from your recommendation?
This comment section is just Krux and Adobe staff right?
So, when a vendor calls me and asks for help to get in front of MY client in exchange for a kickback, that’s ok?
In other news, fire indeed hot.
this kind of thing is rampant in media agencies… not just for software.
I can RFP the tech vendors direct anytime if I want to cut fees.
& that’s exactly what we did when we selected our current DMP (Adobe)
We did not ask our agency for advice BUT I wish we had!
Over the last two years we have leaned on our agency for programmatic guidance, audience analysis and campaign integrations.
Sure we’ve had operational issues and we still have some business questions. But vendor support is a joke. They oversell their roadmap. They vanish once setup is complete. They leave broken promises & unobtainable business case targets. They don’t train our staff. They just cosy up to the account payer and email accounts when the invoice is paid late.
The truth is that my agency is the day to day team. They carry the can for shit decisions. Yes I want to know IF they have a bias BUT it’s actually ok for them to get paid a commission. Just so long as it f*cking works.
Meaning: I hit target!
Choose your galaxy wisely folks..