Cash for client access: a new low for media?
If the rumours swirling through the media market in the past few weeks are correct then one media agency group may have plumbed new depths for the industry.
The widespread chatter talks of a ‘menu’ which appears to have been given by one media agency holding group to a carefully selected handful of media owners – many of which are running second in their markets.
It offers ‘introductions’ to certain clients along with the group boss in exchange for a fee. For example a one-off meeting might cost $50,000, while a series of four could be charged out at $150,000.
And we’re not talking small spenders here either.
It’s being framed as a ‘consulting service’, allowing media owners to get to know clients better and to help them solve their business problems. And here Dr. Mumbo was thinking that was the job of the media agency.
Is this really what it’s come to in the new age of ‘transparency’? Kickbacks replaced with an introduction service.
The big question is whether clients know they are being pimped out for the financial gains of their agency? It’s certainly one way they could save a few bucks on agency fees, but they’re unlikely to get the best rates on the media.
As for the media owners it’s certainly not bought the holding company any fans amongst them, but at the same time many will be too scared to either speak up about it or not take at least one meeting in order not to jeopardise the relationship.
It’s a worrying precedent at a time when clients are taking more of an interest in the media landscape, with more and more attending upfront presentations for all manner of media companies these past few weeks.
Surely this is a joke?!
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Yes, just when advertisers thought they had got on top of the media agency rebates and kick backs, this sounds like some clever agency bunny has come up with a way to hide the practice in plain sight but charging a ‘consulting’ fee. Of course research fees and consulting fees charged to media publishers have been around for years as a source of ‘non-media’ income for agencies. But I wonder if, in the desire for transparency, the media agency (or agencies as it will catch on quick) doing this have informed their clients that they are selling access to them for a fee? And if they have is the client happy with this and perhaps is even getting a cut of the action? It will be interesting to find out how wide spread this practice is, will it not AANA and MFA?
I suppose they call it an advance against distribution?
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There once was a time where sales reps went to events (like 360) and talked freely to agency and marketers alike, exchanged business cards and set up meetings over a handshake, a coffee or a beer. Surely tickets to such events dont cost $50K….
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Can open…worms everywhere….
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If the clients didn’t deflect direct approaches from publishers, there’d be no environment in which this practice could exist. Same old problem: there are three players, and only two are necessary to achieve an outcome. The middlemen will be the architects of their own demise…
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If this is indeed true, Mumbrella it is absolutely scandalous and the MFA and AANA should be contacted for specific comment. However, given transparency is the issue here, shouldn’t you be transparent about who you are accusing and whether your facts are straight. At the moment it’s an accusation based on rumour and innuendo which could be very damaging if proved baseless….
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Another reason why I’m keen to change to client side, this whole transparency movement is all smokes and mirrors. Last week I had the pleasure of hearing the md say if a client is annoying (personality or work wise) we should just charge them the highest fees possible…. Such transparency on offer.
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Obviously not a great look, but it’s still the most innovative thing to come out of a media agency in the last couple of decades.
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Or maybe even a phone call… -looks up to right reminiscing-
sigh
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Dr Mumbo can you please do further investigation and actually call out the group? It does a massive diservice to the rest of the media agencies that would never and have never done this. Unfortunately this just creates further distrust and issues around transparency if it isn’t called out as to who it actually is.
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This does sound suspiciously like paying for nothing. I am surprised that any publisher could be bothered to pay a media agency for something like this.
For a publisher willing to budget that level of upfront cost of sale, there are plenty of ways to directly woo a potential end-client. If the end-client still isn’t interested in talking, then there are plenty of editorial ways to focus their attention on the value of the publisher’s audience.
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My thoughts exactly. This is taking arrogance to a new extreme. If the media companies in question are valuable at all to the clients in the first place, then there’s no real need to use the agency at all. Too often it is forgotten that agencies needs to work for BOTH clients and media companies.
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Come on mumbrella comments, tell us who it is!!!!
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This used to happen in ad agencies as well, but if a different way. Printers were offered a position on a ‘panel’ for a ridiculously high fee. I’m sure it still goes on, but malpractice isn’t limited to Media Agencies.
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Terrible if true but where is the evidence beyond ‘swirling rumour’?
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Intermediaries – pitch consultants – have been taking fees for access to their marketer clients and inclusion to pitch long lists for decades. They may call these membership fees and/or subscriptions to their exclusive circle but it is an uncomfortably close cousin to this.
While I don’t endorse either practice, what’s good for the goose…
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Mumbrella has to name and demonstrate some evidence here. Creates too much rumour and hearsay around who it is and is damaging to an entire industry.
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Mumbrella, wtf is the point of publishing this article if you don’t tell us who it is? Would NYTimes report that someone in the government is conducting shady activities and then not discuss who it is or be able to prove it? Why don’t you substantiate your editorial claims and actually do some proper industry journalism?
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Fake news? Clickbait? Pure speculation & rumour?
Whatever happened to good journalism………?
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Agencies are scared that they’re clients will soon learn that they can deal directly with media publishers and not have to cough up fees for their agency.
The end is nigh.
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I wish! As it stands at the moment the companies/vendors pay huge $ to agencies to send info to publishers who are then expected to let the public know for nothing! Why NOT just send it straight to us and share some marketing $. The death of publishing would be halted overnight.
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Proof in the pudding: since about 3 weeks now (shortly after publishing of this article)… the particular agency in question has been looking for a new ‘head of strategic partnerships’
Perhaps signalling heads rolling?
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