Advertisers still hold concerns over transparency of media rebates

Advertisers still do not believe they are seeing all of the rebates they are should in some sectors in some markets, according to a global survey by the World Federation of Advertisers (WFA).

In November 2011, the WFA asked marketers to rank their perception of the size of rebates in 36 key markets. The WFA does not oppose rebates, but expects greater transparency in the system and for advertisers to benefit from any discounts earned by their agencies

The WFA notes that although the survey is not definitive, with central marketers from 32 multinational companies taking part, it still represents the best look at the geography of media rebates.

Greece and Turkey are the markets with the highest level of rebates in Europe, closely followed by Russia, Ukraine and Spain. There was little change in the level of perceived rebates across all markets since the previous survey, which was undertaken in 2009.

Ranked by media, online was seen as having the highest levels of rebates followed by TV, press and outdoor.

Of the rebates which were given back, 28% were returned as free spots and space. Cash rebates tended to be paid annually according to 82% of respondents and 15% of respondents also used rebates to reduce direct payments for agency remuneration.

In Asia Pacific, the market singled out as having the highest level of rebates was China, followed by Indonesia, the Philippines and India. In this region, advertisers also identified a major gap between the rebates they believed were being returned to agencies and the payments they received.

Rebate levels in China were ranked at 2.8 out of three, but returns were only ranked at 1.7 on the same scale. Similar gaps were seen in Indonesia, (rebates ranked at 2.3 and returns at 1.3) and Philippines (2.1 and 1.6). Marketers in the APAC countries identified TV as the medium paying the biggest rebates, followed by outdoor, online and press.

Thirteen per cent of rebates were returned as free space, while most cash returns were annual, although 16% were received monthly. Fourteen per cent of respondents also used rebates to reduce direct payments for agency remunerations.

Respondents identified Colombia, Mexico and Brazil as rebate hot spots in Latin America. Online was identified as the medium paying the highest rebates, followed by TV. There was a significant gap between the perceived level of rebates paid and returned in Mexico, with rebates paid ranked at 2.1 out of three and rebates returned at just 1.6.

Twelve per cent of rebates were returned as free space, with cash returned annually, although 16% received monthly payments. Twenty-two per cent of respondents also used rebates to reduce direct payments for agency remunerations.

Stephan Loerke, managing director of the WFA, said: "One of the WFA's key priorities is transparency and this survey is intended to inform our members about media custom and practice that is often shrouded in secrecy. Our members expect agency partners to be open and honest about these payments and return them to the advertisers whose investment generates them."  

Follow Nick Batten on @NickBatten2

This article was first published on mediaweek.co.uk