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Media ad fraud is 'rife'

News, 11 February 2015

SYDNEY: Many advertisers are not getting their money's worth from agencies, which stand accused of a range of sharp practices from mark-ups to DSP fraud.

"The whole industry knows that it's rife," according to Jason Dooris, CEO of Sydney-based marketing agency Atomic 212°. "From the smallest clients to the biggest – most are being impacted by elements of media ad fraud," he told Ad News. "It's no secret within the industry that this happens."

An Ad News investigation identified four areas which it said represented the most lucrative areas and prevalent techniques: mark-ups, bribes, missing a client's money and false invoicing.

The first is said to be the main source of fraudulent income with the "smoke and mirrors" of adtech systems creating opportunities to confuse clients.

"Many, if not most of the in-house DSP systems now in operation across Australian media agencies, are built specifically to allow agencies to adjust the bought cost of media with fields built in for the agency staff or management to add new, often inflated rates," Ad News stated.

In this context Digiday recently reported that, according to one unnamed UK media executive, "agency staff are threatened with the sack if they don't recommend their clients put spend through their holding company trading desk".

In the second area, media owners offer cash incentives to media agencies in return for a guaranteed share of the agency's media spend. 

For the third, agencies simply pocket any differences that emerge between what a media owner bills them for and what they have charged the client, a situation which can arise when ads are not shown as requested.

The final fraudulent activity involves doing nothing. A client might be invoiced for, say, 5,000 spots on radio and TV when only 4,750 were booked.


Larger clients booking many thousands of spots cannot keep track of them all and can easily end up paying thousands of dollars for spots that weren't even booked, never mind not airing as requested.

Dooris added that clients were partly to blame for these developments, expecting far more from their agencies than 15 year ago but wanting to pay less.

"Some agencies have adopted rather creative means of compensating for this," he said, "while others take this to another level again in order to meet regional targets or maintain boom-time bonuses."

Data sourced from Ad News, Digiday; additional content by Warc staff