A new study by ANA (Association of National Advertisers) and Reed Smith reveals that nearly one-third of U.S.marketers are aware of rebates / incentive payments from media companies to agencies that may not be reimbursed to the advertiser.
Through its new white paper Media Rebates / Incentives Require Full Transparency, ANA seeks to help marketers better understand this type of incentive. In support of the white paper, the ANA surveyed nearly 200 client-side marketers to fully explore this topic. The white paper calls for agencies to be transparent about these rebates, and for marketers’ agency contracts to clearly outline the proper handling and return of rebate assets.
According to the ANA / Reed Smith white paper, best practices for advertisers regarding rebates / incentives paid by media companies to agencies include:
* Agree that the entire benefit of media rebates / incentives belongs to the marketer and that agencies will be completely transparent regarding any rebates / incentives received.
* Use clear language in agency contracts specifying how rebates will be handled. Contracts should exist at both the agency and holding company level to address “global” advertising arrangements and ensure the fair allocation of rebates / incentives.
* Consider conducting periodic audits to ensure that unauthorized incentives / rebate activity is not occurring.
“It is imperative that advertisers become more aware of these incentives and take ownership of all assets recouped on their business,” said Bill Duggan, ANA Group Executive Vice President. “The only way to make this a reality is for advertisers and agencies to maintain clear, contractual transparency about rebate and incentive activity.”
The study found that 85 percent of those surveyed believe agencies should remit all rebate dollars to clients, and that 63 percent of respondents believe that agencies who accept rebate dollars from U.S. media cannot be objective with their media allocation recommendations. Only 35 percent indicated that they have clear, specific language in their contract that outlines the incentives and rebates that should be returned to them.
Detailed study findings, as well as suggested contract language regarding rebate ownership and agency auditing, are also included in the white paper. The study was conducted from May to mid-June 2012, with 188 client-side marketers responding to the survey.
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