McKinsey: Rebates continue to cripple transparency

McKinsey, the management consultancy, has found that rebates still play a key role in the media-agency ecosystem, despite considerable scrutiny being placed on this practice.

“Rebates are reality,” insists Sarah Armstrong, a partner at McKinsey & Company.

Indeed, she told some 725 delegates at the Association of National Advertisers’ (ANA) 2018 Advertising Financial Management Conference, “they are a fundamental part of this industry.”

In support of her charges, she cited her own experience – in 15 of her 20 years at the Coca-Cola Co., Armstrong led worldwide agency operations (including media agency management) across 200 countries – and a stack of data and verbatims from a new McKinsey study.

Sarah Armstrong, a partner at McKinsey & Company

The evidence, McKinsey found, is damning: Much of...

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