Some advertising agencies may be notorious “double-billers” and thus have a license to steal. An agency may negotiate a lower ad cost for his client advertiser from certain media, like radio and TV stations, but the ad agency may not pass the savings on to their client advertisers who pay the advertising bills in the first place, and instead the ad agency unethically, but not illegally, may pocket the windfall profits he overcharges his client advertisers.
For example, the ad agency may “negotiate” a $1000 cost per TV or radio spot for his client advertiser but instead may bill the client advertiser $2000 for the exact same spot which is what the TV or radio station may typically charge for the exact same spot on its published advertising rate card! The ad agency keeps the $1000 he overcharges his client advertiser plus keeps the 15%, or $150, on every $1000 worth of radio and/or TV spots he sells his client advertiser which is the typical commission earned on the spots he sells his client advertisers when recommending which radio and TV stations to buy commercial airtime on. This can all add up to windfall profits for the ad agency since agencies may buy hundreds of spots at a time for their client advertisers and many agencies have 20 to 40 client advertisers or more.
Client advertisers using ad agencies should always `question “ad agency generated invoices” for commercial media advertising space in newspapers or radio and TV commercial airtime and elsewhere. The advertiser who pays all the advertising bills in the first place should always demand to see the “media generated invoices” that are routinely sent out by, for example, the radio and TV stations that are being bought for client advertisers. These media generated invocies are the ONLY invoices that cleint advertisers can trust.
Is it no wonder why advertising is one of the most profitable industries with the least
amount of overhead expense ranking right up there with the insurance industry in being able to potentially rake in huge profits? Also, ad agencies may even end up wasting ½ of their client advertisers’ advertising budgets but no one, including the client advertiser, can ever really figure out which half of their ad budget is being wasted.
Concerning audience ratings for radio and TV stations and shows, advertising salespeople working for radio and TV stations throw around their station audience ratings and statistics like they are gospel. The audience ratings are used to extract as much advertising money as possible from client advertisers. If audience ratings are high for a particular show or station then they can sell spots for more money to advertisers.
However, these same radio and TV station sales managers turn right around and may complain about how the audience ratings’ sampling procedures are unfair and based on “biased” statistical collection procedures if they stations and shows experience a dip or downfall in the ratings. What advertisers need to remember is radio and TV ratings may attempt to measure audience size and demographic make-up, but may bear no relationship to actually who will see, hear or respond to the ads which is all the client advertisers really care about anyway.
By the time the radio and TV station audience ratings gets published of who is listening to or watching which broadcast stations or cable TV networks, like many statistics used by many industries, these statistics, once published, may already be outdated, invalid, obsolete and unreliable. Consequently, buying radio and TV advertising airtime based solely on so-called audience ratings is like “walking backwards into the future” when planning an advertising budget and campaign. Forecasting the public’s fickle entertainment habits is like relying on the “fickle finger of fate”.
To produce, perform and sell advertising print space and/or radio and TV spots to client advertisers day in and day out 365 days a year requires one to be able to “lie while smiling” if the sales person only represents a particular station, group of stations or a particular show, even though most advertising salespeople may not like to admit this.
SUPPLEMENTAL SOURCE: ANONYMOUS AD MAN WORKING IN RADIO TV PRODUCTION & SALES FOR THE PAST 33 YEARS AUGUST 8, 2016