Tuesday, June 14, 2016

Advertising agencies are accused of serving themselves

http://www.economist.com/news/business/21700427-advertising-agencies-are-accused-serving-themselves-trust-me

Its report has fanned advertisers’ fears. Based on interviews with 150 anonymous sources, K2 found that rebates are delivered both in cash and in subtler forms. For example, media firms pay fees to agencies for services, such as research, that are often nominal or not provided at all. This is worrisome for clients for at least two reasons. Unbeknown to them, agencies might pocket rebates that should presumably be theirs. Or a client might find itself spending money on a certain ad, not because it fits its marketing strategy but because it allowed the agency to gain a rebate