Twelve staff depart Mediacom over misreporting of TV audience numbers on clients Foxtel and KFC
Mediacom CEO Mark Pejic: Says he has been ‘open and transparent’ with the clients affected
Australia’s second biggest media agency Mediacom is facing a major challenge to its reputation after it emerged that it had overcharged at least two clients by submitting inflated claims on the TV audiences its campaigns had delivered.
One member of staff has been fired, another suspended and Mumbrella understands a further 10 have resigned over the affair which involves its clients Foxtel and Yum Brands.
External auditors have been called in to the agency after the ‘reporting discrepancies’ were found in the reports on TV audiences submitted to the advertisers.
So, who actually discovered the issue? Foxtel, via its media audits, or Mediacom, via its “spot checks”?
Cringe.
Wow
!!!!!!!!!!!
Mumbrella
Call for an audit across the entire media buying sector in digital over the past 5 years.
What actually happened here, it’s all a bit vague. Incorrect post reports, and what was the incentive to falsify?
There for the grace of god…
It’s a shame to see what surely must be some very talented people go.
I have worked in media agencies and programmatic buying agencies for the past 7 years. I am happy to offer 10 interested clients spending more than 1m per year (in digital) a frank, free of charge and informal audit of their media and digital buying business. I do not have access to big agency tools but it is very insightful to see how things look using the data that you, as clients, have a right to possess. Please don’t hesitate to get in contact with me to discuss further.
Matt McDonald
0438954494
Long live Media Agencies….as long as unmeasurable traditional media exists they have a place, a revenue stream that is drying up.
I congratulate Mediacom for its courage, openness and transparency.
@Matt McDonald
Leave it to the grown ups please.
This has just broken and you are trying to use it as a channel to drive business and build your contact list.
Poor move in self promotion.
Remember this …
https://staging.mumbrella.com.au/what-your-media-agency-might-not-be-telling-you-168038
@MattMcdonald, if the purpose of your invitation was to suggest companies use you as you offer great judgement I don’t think you’ve done yourself any favours.
Agree re the transparency is clearly a good thing. This could have happened at any agency I suppose. At least they brought it to the attention of other affected clients as soon as they knew
Be interesting to see the results of a programatic audit of all the main players.
Over 15 years ago I worked in AM radio.
We frequently sold more advertising than we could put to air. Sometimes accidentally but many times deliberately. It wasn’t uncommon for 20% of ROS ads to never be put to air.
Where in this article did it mention anything about this being about digital or programmatic ? Given the people mentioned in this article I would suggest it has nothing to do with these channels or method of buying.
An auditor friend opined this could be the catalyst for further audits of the media industry. Partners in auditing firms send notes to all their clients if audits uncover multiple issues within an industry. Particularly if the financial or procedural issues are significant. It’s a nice fee earner while potentially uncovering a few hundred thousand for the client. Who would say no?
You think Procurement departments are painful, wait until Risk and Compliance types get involved…
We’ve had the agency and CMO hypothetical, might be time for the media operator viewpoint?
Any audience metrics based on Oztam are a joke anyway.
If TV audiences were transparent there would be a massvie shakeup in the industry and rates would fall in line with what is acutally being viewed.
The media auditing services and independent consultants we know and love are loving this right now!
Whilst details of Mediacom’s specific issues here are unclear, I can say that anecdotally media has a bit of ‘smoke and mirrors’ about it that is surely no longer going to fly. Production has been through it, and now media (dare I say especially digital).
I’ve had a client discuss bringing their own media people in-house recently, and I don’t blame them when this kind of thing happens. I don’t blame clients for wanting people on their side in this industry, regardless of the outcome of this particular issue.
So @Matt McDonald, what advantages does your company have over say.. a train. Which I could also afford.
This train was set in motion back in the ’90s when accreditation was (correctly) abandoned and the standard 10% commission and 7.5% service fee was done away with.
Then advertising agencies decided that the media department was too much of a cost centre – lots of labour and expensive research to buy. Also no opportunity for outrageous production costs and a nice little mark-up on them.
So, the media department was set adrift and media agencies started to spring up. The problem was that the media agency got 3% of the 17.5% and the creative agency got 14.5% (at the time – but now probably closer to 10-12%).
The business model was make an ad once, send it to the media agency to get it run and get paid four times more than the people that have to plan, book, buy and post-analyse every TV spot. Now that there is around 25 million TV spots a year the remuneration model has to change. The problem is in the holding companies propping up the creative agencies with skewed revenue-to-work ratios. Fix that and watch a lot of the media agency struggles evaporate. Just shifting from 3% to 3.5% is a 17% improvement in revenue.
ouch
LOL @ Beau Ushay!
….. I see what you did there.
http://25.media.tumblr.com/tum.....1_1280.jpg