• BNET, Wednesday, April 13, 2011 10:03 AM

Can Madison Avenue sweep under its couch? Columnist Jim Edwards is somewhat hopeful that Unilever's "preferred vendor" roster of TV ad producers and Britain's media buying probe will shine daylight into advertising's dark spaces. "Both moves could make it difficult for agencies to continue to collect "volume discount" rebates from producers and media vendors," he writes.

The issue deals with who gets the media dollars after an agency pays the bills for production and the media buy. He notes that clients -- the ones paying the production and placement bills -- don't know enough about so-called rebates agencies get at year's end "for the actual amount of money spent with a media owner," which can come as a check or free ads the following year. The system for paybacks, which can reach 5% of the total amount spent with a particular media owner, he notes, are obviously richly fecund soil for gaming.

He quotes one insider saying most clients "haven't got a clue. And the ones that haven't got a clue are subsidizing the ones who do. The agencies use that fact to win new business and to fill their coffers."

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