K2 and ANA Report

The report highlights some particular areas of “non-transparent business activities” of which it found evidence, which involved different methods of passing money or added value between media vendors and media agencies:

• Incentive cash rebates paid by vendors to agencies in return for client billings
• Additional discounts or bonus (free) inventory
• Service agreements – where the vendor agrees to pay the agency for services such as research or consulting, often at inflated prices
• Marked-up pricing where the agency is taking a principal position and pre-buying media inventory, sometimes this resulted in “dual ratecards” – different pricing dependent upon whether the agency was acting as agent or principal.