Media buying appears stuck up to its neck in a contemporary version of Groundhog Day. Should media agencies give all the commission they earn from owners back to the client or should they not. If they don’t it’s media broking.
This is the nub of a $100m claim against WPP brought by the former head of its entertainment division Richard Foster who was dismissed in a round of cutbacks. He claims that the then GroupM trousered the commission on such deals, part of $9 billion in client spending, mostly with the platforms.
Foster says he’s a whistleblower, WPP claims he’s just after the money.
But, in essence, it’s exactly what the US Association of National Advertisers claimed in 2016, supported by a report from Kroll. Agencies said they’d clean up their act although that doesn’t seem to have happened (get-outs are buried in the never-ending contracts they sign with advertisers.) What’s new this time is that the case is actually going to court and WPP has had to provide details of client spend.
We don’t know at thios stage how much money WPP kept – and whether or not it was contractually allowed to. But $9bn is a substantial sum and any percentage at all surely significant. Shareholders might wonder why WPP hasn’t been making a fortune.
Maybe Groundhog Day will finally reach a conclusion.
