Greater transparency needed over media buying rebates

22 March 2012

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22 March 2012 | Adam Leach

Advertisers are calling for greater transparency over fees paid by media owners to ad agencies in return for buying space with them.

The World Federation of Advertisers (WFA) has said while it doesn’t object to media rebates in principle, it feels the details of them should be disclosed to the end client that contracts with the agency so that they can see whether they are getting value for money. A survey by the WFA found a perception that there is a disparity between the value of rebates paid to agencies and how much is ultimately returned to clients.

Stephan Loerke, WFA managing director, said: “Our members expect agency partners to be open and honest about these payments and return them to the advertisers whose investment generates them.”

A survey carried out by the WFA based on the views of 32 multinational companies responsible for $35 billion (£22 billion) in advertising spend, found that in Europe, rebates were most prevalent in Greece and Turkey, and were also common in Russia, Ukraine and Spain. Rebates were least common in Norway, and France and the UK also saw relatively low levels.

It also ranked media markets in order of the amount of rebates. Repayments from online advertising were perceived to be the highest, followed by TV, press and outdoor advertising.

In Asia Pacific there was also a large difference between the value of the rebate and the benefits given to the end user. In China, the gap between the perception of how common rebates were, and what was ultimately passed onto the client, was wider than that in Indonesia and the Philippines.

 

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