The current dispute between media buyer CIA and ITV sales house Laser – and the revelation that CIA, quite legally, exploited its joint ownership of Morgan CIA to finesse its airtime deal with Laser – has raised the question of how much in the world of media buying is hidden so that clients never get to know about it.
“I have never seen media auditors looking so cheerful,” remarks one media director. “Christmas has come early if you make your money on the principle that media buyers cannot be trusted.”
The fact of the matter is that a journalist is in no better position than a client to judge how much “shady” business goes on in the industry. You have to be there in the meetings – doing the business – to know how clean or dirty an industry it is. But the journalist probably hears of many more whispered scams and apocryphal tales than the average client.
Perhaps the story with the best provenance is the document that shows a media buyer in the early Nineties broking space in the colour supplements of the Sunday papers. The media buyer negotiated a blanket rate of 8,000 per page for a period of months – the recession was biting and the newspaper group was desperate.
However, the pages were invoiced to the various clients who were placed on them at prices ranging from 10,000 to 14,000. The media buyer made a pure profit of 264,000 on that single deal. Unfortunately, a rival newspaper group, which wasn’t seeing any of the action, found out about the racket and informed one of the clients – who promptly sacked the media buyer.
Broking media is the most basic and straightforward scheme. It was once said that a particularly reputable old agency had found a way of procuring two “P” numbers on the Donovan Data System (DDS) used to book airtime between agencies and television contractors.
The DDS system uses the P number to send details of the booking automatically, on behalf of the agency, to the client for the same amount as the booking. With two P numbers it is possible to make the price agreed with the TV contractor different to the price charged to the client. Of course this has never been proved and DDS will not discuss the possibility that it ever could have happened.
But broking media prices lacks imagination compared with the racket dreamed up by a now defunct poster buying specialist. This specialist – which went bankrupt owing money to a number of poster contractors – is supposed to have invented an entire poster contractor in the North of England.
This fictitious poster contractor was always very busy and its high quality sites attracted top prices from this one specialist. This trickery could not go on these days, now that the poster industry is served by a number of independent site inspection companies. However, rumours of the odd “ghost” site do still emerge.
It seems no media, and no side of the business, is exempt from slanderous gossip. There is a famous story of the ad sales director of a newspaper group whose home benefited from a fully fitted luxury kitchen when a kitchen manufacturer received a particularly good advertising deal in his newspapers.
Indeed, home improvement seems to be a key feature in many stories. One media agency director is rumoured to have been loaned money for a house extension by the poster specialist his agency chose to put all its clients’ money through. No one is quite sure if the loan was paid back.
More enterprising still is the story of an ad sales executive in the newspaper industry who is now very senior in a very large agency. This lowly exec was always able to fill that one last page left unwanted at the end of the day.
Invariably, the last page was sold to an airline. It was always the same airline and it was always found – a week or so later – that the airline had in fact received the page free just to fill the space. What was only found out much later was that the sales exec was in return getting free airline tickets .
Some tricks in the industry are not so much corrupt practices as borderline professional fouls. It is estimated by one ex-employee of a media buyer, which used a great deal of regional press, that this agency made at least 200,000 a year by invoicing clients for ad space that the regional papers themselves forgot to invoice the agency for.
“Basically, if there are hundreds of thousands of pounds worth of transactions going on there is enough space for error for some buyers to make a tidy profit – as long as the client doesn’t ask about the forgotten invoice,” he says.
Similarly borderline is the business of account queries. During periods when interest rates are high some agencies spend months arguing with a media owner about the placing of a series of TV spots or the reproduction quality of pages. At the same time, the client’s money sits in the overnight money markets earning interest for the agency.
It is hard to condemn the borderline practices that allow media agencies to earn a margin on business. To win business now it is often necessary to work for almost cost price – at a time when an explosion in media means more planning work for an agency to get a client’s message across.
Journalists, of course, are often pilloried for seeking out the shady and corrupt. But the success of media auditors probably means that we are no more suspicious than the average advertiser.