Aegis ruling could have major impact in Germany

11 January 2010

MUNICH: A legal dispute between Danone and Aegis in Germany could put pressure on media agencies in the country to reveal the discounts they receive when placing ads for their clients.

The dairy products and bottled water specialist has accused Aegis of failing to pass on the cost savings resulting from its bulk purchases of TV and newspaper advertising inventory.

A preliminary ruling from the Munich Court of Appeal ordered the marketing services firm to reveal the exact discounts it accrued when working on Danone's account from 2003 to 2005.

Not only will the actual fees the company paid be made public, but it is estimated that the yoghurt maker could ultimately receive millions of dollars in compensation.
Harvey Sarjant, managing director at Addvantage Media, an online advertising network, suggested this precedent may also have broader implications for client–agency relationships.

"This case highlights the need for more balance when it comes to media planning and buying, and showcases whether or not the preferred supplier agreements some agencies operate under are affecting media neutrality," he said.

In contrast, the former head of media for an FMCG firm, speaking to Marketing Week, downplayed the potential consequences of the court's decision.

"I doubt what is eventually published will be revelatory," he commented

"It's no secret that deals are there to be made in media buying, so it may encourage more transparency – but I'm not sure if the ramifications would be long-lasting."

Aegis still has the option to challenge the ruling when written judgment is handed down by the court later this month, and the UK-based firm has indicated it plans to "contest this case through all appropriate judicial authorities."

Data sourced from Marketing Week/Daily Telegraph; additional content by Warc staff