Media rebates in China highest in Asia-Pacific: WFA

Media rebates are payments made to media agencies in return for spending client money with key media owners. 

 

In the survey, respondents were asked last November to rank their perception of the size of media rebates on a scale of zero to three (where three was very high) for 36 key markets.

 

The WFA clarified that the survey was not definitive as it only spanned central marketers from 32 multinational companies. "Nevertheless, it represents a best look at the geography of media rebates," the WFA reported. In total, the respondents were responsible for more than US$35 billion in gross media spend. 

 

Overall, the survey found that many marketers perceived that the level of rebate is higher than what they believe is being returned to the client in a number of markets, such as China where respondents gave rebate levels a 2.8 out of three, but returns were only ranked at 1.7 on the same scale.

 

Similar gaps were seen in Indonesia where rebates ranked at 2.3 but returns at 1.3 and the Philippines (2.1 and 1.6). Marketers in Asia-Pacific identified TV as the medium paying the biggest rebates followed by outdoor, online and press. In general, advertisers in the region identified a major gap between the rebates they believed were being returned to agencies and the payments they received. 

 

In the region, 13 per cent of rebates were returned as free space while most cash returns were annual, although 16 per cent were received monthly. Fourteen per cent of respondents also used rebates to reduce direct payments for agency remunerations. 

 

In Europe, respondents identified Greece and Turkey as the markets with the highest level of rebates, while Columbia, Mexico and Brazil are Latin America's rebate hot spots. In both these regions, online is seen as offering the highest rebates, followed by TV. 

 

In conclusion, the WFA said that while it doesn't object to the existence of rebates, it expects advertisers to benefit from any volume or frequency discount earned directly and from any share of such discounts earned by their agencies. 

 

Said Stephan Loerke, WFA managing director; “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."  He added that WFA's members expected agency partners to be open and honest about these payments and to return them to the advertisers whose investments generate them.