Never until now have I been part of a review team for an advertiser on media agency terms of business.

 
I have now - for several advertisers.

I have found a bundle of nonsense where the media agencies have wrapped up deals that exploit the inexperience of the advertiser for their considerable advantage.

Try these three for size:

• First, is an agency, remunerated on the size of the discount delivered versus a norm. Sounds all right at first glance. But the norm is a variable feast that bears random relationship to an absolute price. So right now with media prices deflating, the agency is buying a higher discount and getting paid more, even though the client has had to cut the budget

• Second, is an advertiser deal (stuck in a time warp of media inflation) that has failed to keep up with the changing times? The agency performance related fee (PRF) is based on media price changes year over year. So right now, with that media deflation, the agency is raking in the dosh. And for what?

• Third, is an advertiser whose media prices have shown significant increase over and above any prevailing trends. Upon investigation the media agency is paid a flat planning fee and a media buying commission. The flat fee continues despite budget cuts and the buying fee has no PRF quotient. Looks like the agency is using this advertiser's budget to help finance better deals for other clients who remunerate the media agency more favorably.

The message for advertisers is clear. Do deals based on absolute not relative prices - just as you do for all other purchases - and ensure you pay the agency based on real like for like improvements measured against complete and not partial market norms.