Mediacom audit: Media agency ‘value banks’ move into the spotlight
Steedman
Mediacom’s audit has thrown new light on the practice of some of the country’s major media agencies of operating “value banks”, using inventory given to them either for free or at a heavily discounted rate by media companies in return for putting a certain amount of business their way.
The revelations led to GroupM admitting for the first time that it operated ‘value banks’. It revealed that last year its subsidiary Mediacom charged four clients for using this advertising inventory rather than passing it on at no additional cost.
Mumbrella has learned that two of those companies which brought the discounted spots were Foxtel and Yum! Brands, two of the clients caught up in the misreporting of TV audiences which has embroiled the agency, leading to the audit which uncovered the malpractice.
I have worked for several agencies where this is common practice (not mediacom) and built into agency revenue forecasts. Glad to now work for an Indy were these value banks are given to clients who earn them.
someone look further than Mediacom and GroupM.. this is SOoooo widespread in other large media agency groups
This practice and others even more sinister are so prevalent. Let me assure you this goes back to the 70’s.
Turn the tables… When a manufacturer is able to negotiate lower rates without changing order quantity from a supplier… savings are not past on to their clients / consumers. This happens in many industries.
@WhatIF
Not sure about your logic there broseph….
A manufacturer is spending their OWN money to produce a product.
Ad agencies are being entrusted to spend other peoples money.
Based on the lack of advertising from ad agences on this site I would suggest that the combined media spend of ad agencies in Australia on their own advertising is about one fourtieth of f*uck all.
So yeah, if it was an ad agency spending it’s own money you would have some sort of analogy that works.
Unless all these ad agencies are advertising elsewehere and I just missed it…….
@Errr…. that makes sense.