B&T’s Fast 30 podcast is back again, this time featuring CHE Proximity CEO and industry nice guy Chris Howatson.
Among the many tantalizing topics spoken about throughout the podcast (produced by audio specialists Eardrum), it was the discussion about media transparency that had B&T’s John Bastick and Daisy Doctor sitting on the edge of their seats.
Listen to the podcast here:
When asked which issue in media had not been given enough attention recently, Howatson was quick to respond with, “transparency”.
With Howatson later adding, that there is “huge dodginess” in Australian media.
Howatson admitted seeing shifty behaviour among media agencies while working with them for an unnamed client.
“I see it and won’t suggest who or anything, we work with some clients alongside media agencies and you can see in their proposals; the recommendations are biasing towards highly commissionable channels,” he said.
“Whether that’s through pre-organised rebates or whether that’s inventory they’re owning and trading on; there’s just not the transparency to the client about whether the mark up they’re getting from those sources of ad inventory is more or less than others,” he added.
Asked if the solution is self-regulation, Howatson said no.
“I think it’s going to be really hard to self-regulate because it’s broken.
“The ex-CEO of MediaCom said, ‘Why is it agency compensation is going down yet revenue is going up?’ Those two things just don’t line up, right, so that just kicked off the whole thing.
“So I think the industry has done it to itself because procurement has pulled out all the margin and therefore people have had to look in different ways to make money.
“That’s why they’ll create their own inventory banks and sell them off at major multiples higher than what they paid for it,” Howatson said.
Speaking about who’s getting it right with transparency, Howatson praised Omnicom Group.
“Omnicom Group, for example, is very clear about remuneration.
“It’s certainly how we model our agency, we call it ‘Nothing Dodgy Media’.”
“If we can’t disclose transparency around where their dollar goes than you end up spending a lot of money,” he added.
Check out the podcast below:
It’s the latest episode of B&T‘s Fast 30 podcast, produced by the talented team at Eardrum.
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