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Dentsu-Toyota fiasco: Are media agencies on the verge of losing clients’ trust?

The Japanese arm of Dentsu, Dentsu Inc has admitted to claims that its subsidiaries, DA Search and Link (DASL), had overbilled long-serving client Toyota for its performance marketing services. This claims first surfaced in a report on AdNews.

A DAN representative in a statement to Marketing said the case is one which is isolated to its digital operations in Japan. While Dentsu said it was not able to provide specific details related to an individual client, it said in a statement:

“We can say, however, that there were some inappropriate operations related to digital media business transactions which have already been reported to the clients concerned. We are currently in consultation with them regarding any further steps that may be required.”

Toyota has declined to comment on the matter.

This is not the first time a media agency has faced such a public issue of falsifying claims or overbilling clients.  In 2014, WPP’s MediaCom faced similar issue for fabricating campaign data in the Australian market which led to several of its other clients reviewing their relationship with the agency.

Soon after, WPP’s GroupM  appointed John Montgomery to a new role, titled executive vice president, Brand Safety, GroupM Global.  He was work with GroupM’s community of digital advertising and media trading experts at Mindshare, MEC, MediaCom, Maxus, Essence, Xaxis to create a coherent set of global standards that operationalise brand safety for GroupM’s clients in every market in which they advertise.

Moreover, the shocking news triggered the Association of National Advertisers (ANA) in July to finally unveil a new set of guidelines to ensure transparency between agencies and clients. And ANA also commissioned an assessment by K2 Intelligence. ANA said that marketers are now expected to require media agencies to be fully transparent in their proceedings in order to elevate trust and restore confidence in the agency-client relationship.

It also released a recommended contract template, urging marketers to leverage it as the foundation for master service agreements with agencies.

Crisis for media agencies?

But are media agencies who many say, have long stolen the spotlight from creative agencies now having a moment of crisis?

Darren Woolley, founder and global CEO of TrinityP3, said that trust is very important in these relationships, but the new Dentsu-Toyota revelation is proving that trust alone will not protect a marketer from practices which are not transparent. If this can happen to a client relationship which has been seen by the industry as long standing and significant, it can happen to anyone. This, he added, is an indication that marketers and advertisers in the region can no longer ignore the issue of media transparency.

Many marketers here have been quick to dismiss the issue believing it is a problem for the USA and Australia but not an issue for Asia.

“Every marketer in the region now needs to rethink how they are contracting their media agency arrangements to deliver transparency, value and performance,” Woolley said. He added many marketers go into relationships with their media agency providing total trust for the investment of significant sums of money with little or no regulation or governance around how that money is charged or invested.

“The fact is that media agencies have been charging advertisers less up front in the way of fees for a number of years because they know they can make up the shortfall in other less transparent ways,” Woolley said. He added simply changing agencies will not be a cure but rather marketers and agencies need to implement contracts and practices to ensure transparency, performance and value will slowly build trust.

Paul Davies, managing partner at Roth said in his interactions with marketers, he sees a general continuing trend downwards of trust of agency marketing services generally – not just media. Specifically the issue is centred around a lack of transparency and openness regarding the commercials.

“Clearly, the media companies are the ones at the sharp end of this negativity at present and as digital media spend continues to increase this will not improve until transparency is improved,” he said. Moreover, transparency is hampered by the number of service / technology providers involved in the process of delivering digital advertising.

The tone and message of the holding company bosses doesn’t help in this regard as we certainly see this as just spin to try and deflect the issues.

“But clearly marketers have work to do here as well by improving and professionalising the management of the marketing service companies they use,” he added.

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