Commentary

Check, Please!

The media industry has lost the plot to its own novel.

Case in tipping point: Laura Desmond, a top executive at a media ad agency, accepted a personal payment of stock options from a media sales organization that her agency does business with. This “Pete Rose betting on baseball” kind of conflict of interest is shocking enough to spark major reform.  Instead, it was barely a blip in the news coverage of our industry.

If Desmond accepted a seat on the board of Tremor Media to gain insight to help her clients navigate the online video space, then that’s great thinking on her part.  Accepting personal payment for doing so appears professionally awkward at best.  When this was first reported, she defended her actions by claiming her position on Tremor’s board had zero influence on the reported $18 million dollars of media spending her agency placed with Tremor Media (which represented 20% of Tremor’s revenues). 

I worked at an ad agency.  When a boss’s boss had a “relationship” with a publisher of a magazine we were evaluating, that magazine made the recommended plan.  So while there may not have been direct influence in this case with Desmond, it’s impossible for there to have been none.

When this perceived breach of ethics was uncovered, Desmond could have been fired.  She could have resigned. She could have been suspended until a further investigation was conducted.  Instead, she went to Cannes.

Let’s be clear. Desmond did not break any laws, and she has a track record of success servicing her clients, with a career many would love to emulate. I mean no disrespect to her with this column, but this decision to accept personal payment from a publishing vendor her agency spends her client’s dollars with, has me wondering: How did we arrive at this point, and isn’t it time to say enough already?

How many cars does AOL have to give away to media buyers, how many trips do media buyers need to take on a publisher’s dime, and how many inappropriate gifts have to exchange hands -- all in the name of “building relationships” -- before we recognize “the way business gets done” is bad for our business? “Building relationships” has become a euphemism for condoning the acceptance of bribes.

Our collective job is to help an advertising communication message reach its intended target.  How do the millions of dollars spent by publishers to “build relationships” with media buyers truly help this cause?

What if this money was spent developing unique research to learn how advertisers can create messages that have a better chance of resonating with the audience that a publisher reaches?  What if publishers reinvested this money in social media to extend the awareness of their clients’ campaigns?  There are so many options for how to allocate these “T&E” dollars that could directly affect the success of a client’s campaign that don’t involve tickets to major sporting events.

This entire ethical debacle started with free lunches.  Over the years, things have gradually escalated to extravagant gifts, all-expense-paid trips, a car, and now stock options -- all on the piggybacks of our clients’ bank accounts. 

This has to stop, it should stop -- and it is so easy to make it stop.

Clients can’t dictate this change.  Publishers won’t, either. It’s up to (insert irony here) the top executives at ad agencies to put an end to this behavior.

All that needs to be done is for Sir Martin Sorrell and the other leaders of the major ad holding companies to simply and definitively declare that the only thing media-buying employees can accept from media sellers are lunches.  Nothing more or less will be tolerated. End of story.

Media graft was one way of enticing young talent to join the industry at a time when media sat at the back of the bus.  Today, we’re driving it.  Isn’t it time we acted like leaders, instead of children left alone in a candy store?
8 comments about "Check, Please!".
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  1. Anthony Green from Optimal, June 20, 2013 at 9:52 a.m.

    hear hear Ari! There is so much of this happening in our industry that goes unreported. Needs to stop.

  2. Zachary Cochran from CPXi, June 20, 2013 at 10:46 a.m.

    “'Building relationships' has become a euphemism for condoning the acceptance of bribes." This, fellow ad folks, should not be.

  3. Scott Pannier from DistroScale, June 20, 2013 at 11:40 a.m.

    Ari, I 100% agree with you about the position on the board and the "coincidence" that Tremor gets 20% of their revenue from this 1 agency. However, think outside of the advertising world. In every single industry, companies take potential clients (and clients) to sporting events, week-long golf boondoggles, dinners, etc. It's a nice pipe dream, but "just lunch" would be impossible to police and I wouldn't say no if I was invited to play Pebble Beach or Bandon Dunes!

  4. Ari Rosenberg from Performance Pricing Holdings, LLC, June 20, 2013 at 11:49 a.m.

    @Scott -- Pebble Beach is overrated I would play Bandon Dunes in a heartbeat over that :) -- you know I get it's a pipe dream -- but man, things are really disgusting at this point -- and the real benefit of eliminating all graft (other than lunch) is that each publisher would get a fairer shot at earning business and sellers would get more time to spend w/ family and "real friends" -- it's time for real change and this would be very simple to implement actually.

  5. Paula Lynn from Who Else Unlimited, June 20, 2013 at 2:54 p.m.

    It all started when agencies did not want to pay employees enough, a boon to the people who owned agencies. Any types of bonuses or in rare cases pensions expenses are reduced. Overall social security benefits are effected but who is counting ? Media trades helped to build the culture. (The tax free-ness of it is a whole other story.) Now you have pay for play. (Smaller markets with smaller accounts with smaller budgets do not have the extras like the conglomerates.) So who owns you, all of you, each of you, all of us ?

  6. Tim Orr from Barnett Orr Marketing Group, Inc., June 20, 2013 at 5:21 p.m.

    Even lunch is a problem. I've seen reps or vendors who frequently bought the lunch get an unfair advantage and the ones who did not run last. It reminds me of the old joke that begins, "Would you sleep with me for a million dollars?" Still, we probably have even less chance of stopping lunches than we have of stopping expensive gifts and trips. I worked in a highly regulated industry once. We couldn't give or receive anything worth more than $25, as I recall. It usually only takes one returned gift for a vendor to get the message. And, when it comes right down to it, they then have to begin focusing on how their business offering will benefit their clients. And that's a good thing!

  7. Tony Anderson from Incline Video, June 20, 2013 at 7:40 p.m.

    Good one Ari.

    @Scott - Don't forget Torrey Pines in San Diego...one of my favs. :)

  8. R.J. Lewis from e-Healthcare Solutions, LLC, July 14, 2013 at 12:32 a.m.

    I disagree that clients can put an end to this. They can and should. Clients can easily fire an agency who has a conflict of interest. That would send a clear message. Agencies are notorious for hiring very young professionals and paying very little but w/ the promise that "you'll be wined, dined, taken to shows and ball games as much as you want". Agencies should also stop relying on publishers to supplement their pay packages w/ perqs. Again, clients could stop this in an instant if they chose.

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