Aurora Magazine

Promoting excellence in advertising

Four sleazy kickback scenarios

Sensational advertising disclosures.
Updated May 24, 2018 01:48pm

Kickbacks have become systemic to the advertising process. They pose a no-win situation to advertisers, to brands, to the creative impulse, to the media agencies and the media itself. They compromise the integrity and the effectiveness of the entire industry. CEOs must reclaim their marketing responsibilities and ensure transparency in the media buying and agency selection process.

CEOs Must Perform An Integral Role In Approving Media Selection
Informed media choice is made on the basis of the media that has the reach and audience profile that corresponds to the brand’s target market. Such choice is made on the basis of a medium’s effectiveness to deliver on the brand’s communication objectives. Instead, such choices are informed by what translates into the self motivated perceptions of a brand manager or marketing director who may insist on selecting certain media based on the fact that the tariffs of such media make ample provision for kickbacks to be paid directly to them or to be funnelled through an advertising agency. The outcome: the brand is advertised on the wrong media, resulting in a virtual disconnect between the brand message and target audience.

CEOs Must Play An Integral Part In Selecting The Right Creative Agency
The selection of a creative agency depends on an agency’s track record of working with brands as strategic partners. Before appointing an agency, CEOs need to ensure that the agency possesses the required understanding of the business challenges and competitive environment posed to their brand.

Unfortunately, selection is too often based on a personal pecuniary advantage to a brand manager or to a marketing director who will intervene in selecting an agency on the basis of noncompetitive criteria. Thus, creative output from an agency is thrown to the dogs, and the kickback is born.

This unofficially negotiated retainer fee and kickback commissions are often translated into highly inflated TVC production costs and freebies in the form of excessive travel and entertainment to crucial decision makers in the firm’s marketing and sales structure.

The fallout for the brand is that successful agencies have no motivation whatsoever to do any real work on growing the brand on the basis of creative excellence and consumer top-of-mind recall. The advertiser ends up paying the unnecessary cost and the process of an even media selection readily suffers.