Uber vs Fetch Will Ask -- Do Rebates Lead To Fraud?

Things suddenly became very real in the strained relationship between media agencies and their big-name clients. Just a couple of days after Marc Pritchard from P&G repeated his claim that more transparency is needed and that only 25% of spend reaches customers, along come a massive development. London-based mobile advertising agency Fetch is being sued by Uber for fraud.

It is the San Francisco office of Fetch that is facing the legal action, but this is a British-based company, headquartered in London and owned by Dentsu Aegis. The charges will sit very uncomfortably because they accuse Fetch of the worst type of behaviour -- fraud. Now, let's be very clear. Fetch denies the charges and is reported to be considering countersuing Uber over what it claims are missing payments, which it says affects additional companies. 

The charges from Uber are centred on whether its multimillion-dollar mobile advertising account was not spent wisely. In fact, Uber is saying much went on fraud. This would suggest that clicks were coming from fraudulent sources. Basically, Uber is saying Fetch bought dodgy inventory that resulted in botnets and fake users clicking on its ad and downloading its app. The damage done? Well, Uber is asking for $40m.

Another side to this whole fiasco is transparency, and I predict it will turn out to be the main issue. Industry insiders are telling me privately this is where they think the headlines are not appearing right now, but that might change. The top charge of a large agency owned by a holding company defrauding the most famous travel app in the world is obviously the big story at the moment.

However, across the industry there will also be questions raised over rebates. It has always been a thorny issue, and my tip from industry practitioners is that transparency over rebates will be a big part of this investigation. The problem is an old one. An agency gets kickbacks by buying a set amount of inventory through one network or publisher. This encourages spend to go in a certain direction, earning the agency not only fees from their client but also rebates from the channel. 

Aside from whether Fetch knowingly bought fraudulent traffic, then, the big issue will come down to whether Fetch was supposed to keep rebates, hand them back or spend them on new inventory. I can tell you I am fairly confident that Fetch will claim it never promised to return rebates, and Uber will say that it was under the impression or led to believe they would be ploughed back in to further campaigns.

What I think will be the ultimate question here is whether transparency is at the root of fraud. Did the rebates Fetch was asking the market for encourage networks to make ends meet by supplying bot traffic? If an agency wants a lot of skin in the game, if they're looking for a decent kickback, can networks only supply this if they turn a blind eye on the quality of the traffic they supply?

I have to be honest. I think this is what the entire case will come down to. So, it may appear to be about fraud, and it kind of is. However, at the root of this whole debacle is transparency and what happens to rebates. It moves the debate beyond whether a brand should share in the spoils to a more fundamental question. If agencies require rebates, does this mean that their placing huge spend in certain hands, in returns for kickbacks, encourages poor quality content to be supplied?

Ultimately, the question will be be whether a lack of transparency on rebates leads to fraud. 

1 comment about "Uber vs Fetch Will Ask -- Do Rebates Lead To Fraud? ".
Check to receive email when comments are posted.
  1. Shailin Dhar from Method Media Intellgience, September 21, 2017 at 1:23 p.m.

    Refunds are not the same as rebates. Please be careful with the context you are creating. 

    Fraud is rampant in the mobile app advertising world and clawbacks for suspicious clicks/installs from networks and other supply partners are commonplace. 

Next story loading loading..