Is this the most hated man in advertising?
Last year Jon Mandel’s allegations of media agency “kickbacks” lit a transparency firestorm across the marketing world. He sat down with Nic Christensen to discuss his reasons for coming clean on the unspoken practices.
“It wasn’t supposed to be inflammatory,” says Jon Mandel with deadly seriousness, as we sit down for a drink in the midtown New York steakhouse he picked for our interview.
But almost without missing a beat the plain-speaking New Yorker sets out his position: “Look, it’s one thing if you steal $10m from a client but it’s another thing if you kill the brand in the process because you give it bad media.”
About 14 months ago the the former CEO of GroupM agency Mediacom in the USA got up on a stage in front of an audience of marketers at an ANA event in Hollywood, Florida, and turned the world of media agencies on its head.
His accusations about agencies demanding rebates from media owners – known in this market as value banks – started a chain of events that would finish in ex-FBI investigators being called in to investigate the extent of the issue.
What a great piece – fantastic insights. The industry needs more people like this guy.
What would be fraud in any other industry becomes a mere linguistic puzzle in ours.
I thought everybody knew this by now.
Corruption on a global scale but the clients need to look in the mirror, and in most cases, grow some balls and stop putting so much trust in the system.
At some point it may start to occur to Clients (and their Procurement Departments) that paring back agency margins to infinitesimally small amounts creates an incentive to make up lost revenues in other, less transparent ways.
Think of it as Newton’s Third Law of Media.
This is a great article.
However it is fair to say that Ruthers said all of this back in 2012 (see below) and again in 2015 when he accused media agencies of money laundering with their kick backs and value banks. Be nice if he got the credit that he deserved; Slingshot has NEVER entertained this behavior and has been the most vocal about it.
Anyhoo – all power to anyone who wants to do the right thing.
http://www.adnews.com.au/adnew.....laundering
http://www.adnews.com.au/news/.....e-for-2016