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MediaCom tightens procedures

News, 10 March 2015

SYDNEY: MediaCom is to tighten its account reporting procedures in Australia after an independent audit into the media agency indicated malpractice by several individuals on three client accounts.

The revelation in early December last year of "irregularities" in the accounts relating to Yum! Restaurants, insurance business IAG and broadcaster Foxtel sparked an internal review and a flurry of dismissals, as well as the launch of the independent review by consultants EY which has now reported.

"In my 40 years in this business I have never encountered anything of this magnitude and frankly, it terrified the crap out of me and everyone else in the organisation," John Steedman, chairman of GroupM, MediaCom's parent company, told Ad News.

EY looked at 45 campaigns across 19 client accounts from MEC, Maxus and Mindshare with a "heavy emphasis" on MediaCom, going back two years.

In addition to confirming allegations that post-campaign analysis reports for three clients were manipulated, it found three more client accounts with discrepancies although these were said to be "rational or accidental" rather than a result of malpractice.

A new compliance team will oversee the implementation of EY recommendations and monitor ongoing TV performance reporting.

But that is far from the end of the story, as several MediaCom clients, including IAG and Energy Australia, are reported to be reviewing their accounts.

And Mumbrella reported that there are still unanswered questions over the affair, not least why the staff concerned had taken the actions they did and why it had taken so long for these to be uncovered.

"If any one part of this should ring alarm bells for the industry it is this – the whole shemozzle appears to have been started by one junior," it said.

"Are we putting too much trust and not enough oversight on 22-year-olds, who are buying millions of dollars' worth of television on behalf of big brand name clients against what are possibly unrealistic or unachievable performance targets?" it asked.

Data sourced from Ad News, B&T, Mumbrella; additional content by Warc staff