‘If agencies don’t realise they are doing something wrong you have a big problem’, says value banks whistleblower Jon Mandel

Jon MandelFormer Mediacom USA CEO, Jon Mandel, whose comments sparked US advertising association ANA’s controversial transparency debate, says he feels vindicated by the ANA report findings that were released overnight.

Speaking with Mumbrella from his home in Canada, Mandel, who in March 2015 made a speech to an ANA conference that sparked the media rebate furore in the US, said the findings of the report should be a catalyst for reforms in client/agency relationships globally.

“To me, on one level, I’m just glad that someone else saw the same thing,” said Mandel.

“I’m glad that what I said (at the ANA conference in Florida) was right and was shown to be right. But on the other hand I’m also horrified that I was right; what it showed was that, indeed, it is pretty bad out there.”

Among the findings by K2 Intelligence were that the industry faces “systemic non-transparent business practices”, in terms of media owners providing “kick backs” to agencies and accusing top media agency executives aware of and, in some instances, mandating them.

Mandel also took aim at the major media agency holding groups, many of whom have attacked the report for failing to name those who are acting unethically.

“The fact that the agency (holding) groups are out there bad-mouthing this shows how bad the problem is,” said Mandel. “I really hope that they actually up and say ‘you know what? we’re going to fix this’.”

Among those to take aim at the ANA are Publicis boss Maurice Levy, who had described the report as “unfair and an unwarranted attack on the entire industry” but Mandel argued that it was in no one’s interests to begin a witch-hunt by naming agencies who had misled clients.

“I think the reason you don’t name names is because you are trying to do the right thing and keep everyone in business,” he said.

“Some of the things that have gone on are truly untoward and I think the ANA doesn’t name names because they are trying to move the debate forward.

“They are trying to improve the industry and if you go and name names we are going to have a worse problem because it is so pervasive.”

Asked about comments by the likes of ANA CEO Bob Liodice, who noted today that other markets such as Australia might also need to look at doing a similar K2 report, Mandel said such global pressure would continue so long as agencies continue to deny the practices.

“It is clear to me that if they are still sitting there denying that this happens and instead bad-mouthing (the report) that’s not helpful to moving this forward,” said Mandel.

“It’s like FIFA; if it is so culturally broken that agencies don’t realise they are doing something wrong then you have a big problem.

“The rebates globally are not as allowable in most places as people have been led to believe. If the likes of ISBA in the UK – where rebates are supposedly okay – is saying this is a problem because they are hiding what the rebates are, that’s a sign.”

Referencing a sit-down interview he did with Mumbrella last month on the issues around the report, Mandel said: “As I said to you last month, If you steal $10m that’s one thing.

“If you kill a brand because you buy bad media instead of honouring obligations, that’s far, far worse.”

Asked what advice he would give to marketers globally who are now digesting the 56-page report, Mandel said: “My advice is make sure you can audit all the way back to the original provider of the media or technology and then go do the audit and not just one out of two or three transactions.

“You need to look at everything and so you follow the money to the source.

“Make sure if someone is recommending to use a specific vendor for a given effort they have an alternative and have a damn good reason for what they recommend and why they aren’t recommending the other product.

“Then check those non-recommended deals every now and again to see if they are legitimate non-recommended deals.”

Mandel cited the Cold War mantra of ‘trust, but verify’ which he said would now become far more prevalent in the advertising industry globally, and that marketers needed to take control of their relationships.

“It’s about trust but verifying because it allows you to have a better relationship with the media and suppliers,” he said.

“At the end of the day clients have to let someone else step in and convince people that they are the final authority; it’s the client’s money – they should be the one who has the relationship.”

Asked how much responsibility marketers had to bear in bringing about the current global transparency furore, Mandel said: “Clients have to ask themselves: ‘are they looking at the right metrics?’

“Don’t ask your agency to do something and deliver certain numbers that don’t have any direct relation to lifting your sales.

“Agree upfront what the metrics are and what the KPIs are you expect to be hit and make them reasonable.”

The former media agency CEO noted that part of the problem was also that many marketers asked too much of agencies.

“They are media professionals they are not magicians,” he said. “Are agencies to blame for overpromising what they can deliver on cost or quality? Or are clients to blame for demanding it? That’s an interesting question.

“Clients need to stop suspending disbelief. The agency is supposed to be a professional providing you with proper advice not tarnished by their own profit. Marketers need to know the limits of that.”

Nic Christensen


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