Ad Age is out with a story today about an unidentified marketer that spends hundreds of millions on ads that has been subpoenaed by a grand jury in connection with the ongoing Justice Department-FBI probe into media-buying practices.
The investigation began last year.
It’s unclear when the subpoena was issued -- The Wall Street Journal published a story last fall indicating subpoenas were being issued back then in connection with the investigation.
It is interesting a marketer is being subpoenaed, if that is the case. Marketers are the alleged victims in this probe, right?
Media agencies allegedly scammed marketer clients by taking undisclosed rebates or acted as principals and sold marked-up inventory without the clients’ knowledge or approval. The feds are defining these alleged misdeeds, and others, such as lying about those misdeeds, as “wire fraud” while they pursue wrongdoing in the case.
Why would a marketer have to be subpoenaed to hand over evidence in a case like this? Especially if it believed the agency involved had done it wrong? Especially a marketer spending that kind of money, one that could presumably do business with just about any agency it wants?
Out of fear of retaliation? Are marketers that cowed by the agency community? Unlikely -- especially a marketer that spends hundreds of millions a year on media.
One possible answer: Marketers generally shy away from controversy. Still, if you feel you’re being ripped off by a vendor, grow a pair and help nail that vendor to the wall. Help fix the system if it’s broken. In the long term, whatever investment it takes to accomplish that goal is worth it.
But maybe the marketer in question was OK with whatever its agency was doing. It’s hard to know where this probe is headed. Maybe nowhere, like the government’s recent examination of commercial production practices.
Anyone who's been around must be aware of many instances of "payola" where an ad seller provides what amounts to kickbacks in slightly different form than plain cash to media buyers as well as their clients---in exchange for becoming "must buys" for the clients' media schedule. Often, both the agency and the client share the guilt in such deals ---the point being that it's not always the agency that's "guilty".
Media Buying agencies are humorless, bad for business and unnecessary.