April 16, 2015

Corruption And Fraud Starting To Hurt

A couple of weeks ago we posted a two-part piece that asked Will Advertising Corruption Scandal Explode?

The nub of the potential scandal is that the gullible clowns in big marketing corporations are being screwed blind by the sharpies in the global agency holding companies who are...
1. Buying online media at one price and selling it to them at another.

2. Taking kickbacks...oops, I mean "volume-based incentives"...from media vendors.

3. Buying media that is in the agency's best interests, not the client's.
My point of view was that clueless advertisers have been getting so badly date-raped by every variety of con man, digi-hustler, techno-crook, and cyber-scammer for so long that they probably wouldn't even notice a few billion gone missing to agency scoundrels.

However, it could be that I'm wrong. In the last few days a couple of influential ad industry analysts have been downgrading the big agency holding companies based on the belief that their somnambulant clients might finally be regaining consciousness and realizing what's been going on.

Brian Wieser, an influential analyst at Pivotal Research Group, had this to say...
“The volume and specificity of allegations by aggrieved media owners, former agency executives and marketers are difficult to ignore. Rightly or wrongly, there is a growing perception among marketers that agencies have been misleading, transferring value associated with media volumes without clients’ full understanding or support.”
He went on to say...
“As...more specific allegations come to light, a drumbeat of negativity will build around the sector over the course of this year....Given this risk, we’d recommend that investors move to the sidelines or exit the sector altogether while it all plays out.”
So who knows, maybe these creeps will finally get what's coming to them.

I know how hard and how diligently most people in the agency business
work on behalf of their clients. I've seen the blood and I've felt the suffering.

The online media industry is rotten to the core and a terrible discredit to our business.

And as we have documented here over the past few years, the agency component of online media fraud and corruption is only a small part of this sleazy circus. 


Cecil B. DeMille said...

Where are the lawsuits? Where are the P&Gs and other huge clients and their lawyers demanding to know where their money is, and demanding it be returned? Where are the authorities citing and imprisoning the hucksters for fraud? I suddenly have hope that the holding company model of advertising is about to explode into the giant ball of shit it is.

uglymugagency said...

Bob I'd be interested to read your opinion of the EU suing Google for anticompetitive practices, especially since Google's adwords and display ads are the most used mechanisms behind much of this ad fraud chicanery.

Conor said...

And I used to wonder how the holding company big shots in Paris, London and New York could happily award themselves performance-related bonuses and salary increases when those of us working in their creative agencies were met with the inevitable refrain of "sorry, you didn't meet your targets this year so bonuses or cost-of-living increments." Sadly, these reports referring to agencies ripping off clients don't seem to differentiate between the media agencies (who are doing the scalping) and the creative agencies whose fees are being cut day-by-day. And meanwhile Messrs Maurice, Martin and John and others of their ilk are laughing all the way to the bank - which they probably own by now.

Bruce Braun said...

Ad-tech for agencies are nothing more than get-rich schemes filled with false promises and bogus results. We can never underestimate the allure and power of greed based upon big returns with little work needed. The pitch is now anchored in the pseudo-salvation fixation of Big Date and agencies not wanting to loose out.

The current crop of ad-tech companies and their agency clients remind me of the relationships between gullible TV viewers and the DR business back in the 1980's. Remember all of the "Buy Real Estate With No Money Down" hucksters that populated overnight TV? They promised fast wealth with little actual work needed. The pitch was always based upon greed. None of those hucksters actually owned any real estate beyond their own homes: they made their money off of selling the books and courses using 800 numbers and conferences at the local Holiday Inn's. And by the way, there was one person in Phoenix who ghost-wrote ALL of those books and courses! True story.