Daily Mail admits to paying $52.5m in cash and discounts to agencies and clients last year

The issue of media agency transparency has come to the fore again after the Daily Mail revealed it gave away $52.5m (£25.6m) in cash and discounts to agencies and advertisers in the last financial year.

Daily Mail AustraliaDetails of the “discount and rebate provisions” by parent company of the UK-based publisher the Daily Mail General Trust (DMGT) are revealed in its annual report, noting its rebate payments were down from £26.2m in 2014.

While media owners often provide rebates to media agencies and clients it is rare for them to reveal the size of these payments. Some media agencies use these rebates to create ‘value banks’, an practice which hit the headlines this year after Mediacom admitted it had misused them with four clients.

The Daily Mail operates in the UK, US and Australia, with its website locally a joint venture between the DMGT and Nine Entertainment Co. Both parties have been approached for comment about the size of its rebates in the Australian market.

The annual report describes the rebates as follows: “dmg media segment enters into agreements with advertising agencies and certain clients, which are subject to a minimum spend and typically include a commitment to deliver rebates to the agency or client based on the level of agency spend over the contract period. These rebates can take the form of free advertising space, cash payments or both.”

That figure of £25.6m in rebates comes as the financial reports shows the Daily Mail media segment reported an overall revenue of £730.9m and an adjusted operating profit £96.1m.

Internationally the issue of rebates hit the headlines after former Mediacom CEO Jon Mandel alleged they were widespread in U.S. agencies.

Domestically Mediacom also put the issue front and centre after its investigation into the misreporting of TV figures by staff also discovered the agency had charged four clients for the free ‘value bank’ inventory, in breach of GroupM policy.

The admissions around the use of ‘value banks’ by GroupM’s also shone a light on the issue of transparency in Australia.

Last month the industry body representing the major media agencies the Media Federation of Australia published a new transparency framework which for the first time acknowledged the existence of ‘value banks‘.

Three of the major holding groups IPG Mediabrands, Dentsu Aegis and Publicis have refused to comment on whether they use such ‘value bank’ structures in Australia.

Nic Christensen 

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