239: Media Assurance & Transparency Still a Global Issue with Rizwan Merchant

On this 239th episode of "Marketing Today," host Alan Hart speaks with Rizwan Merchant, CEO at Media Merchant. Merchant is the first guest from Pakistan and brings over a decade of experience in the Pakistani Media Industry. Today, we talk about the 2016 ANA Transparency Report and how these issues are still present today, four years on.We start our conversation with the exploding media industry in Pakistan, which has gone from less than $100M in advertising expenses to over $550M in just ten years. With that massive growth has come a plethora of problems, not only in Pakistan but also for marketers worldwide. Merchant has seen "exactly what goes on behind the doors." Merchant then takes us through the ANA Transparency Report that came out in 2016, which identified a myriad of problems and fraudulent practices among the agencies that bridge the gap between the media houses and advertisers. The advertisers have forgotten that "agencies are there in the business to make money as well," so their intentions may have nothing to do with the benefit of their client. Advertisers are still losing boatloads of money because of their inability to structure contracts for themselves. Merchant says, "the easiest way to plug that financial outlet is to start paying the media directly instead of going through the agencies."Merchant suggested that the best way to battle this problem is for clients "to upgrade their knowledge when it comes to the media supply chain." Another problem now is that "many agencies have started to own the media that they are pushing to advertisers." It seems if there is money to be made, agencies will find a way. The onus is on marketers to be smarter and more vigilant.Highlights from this week's "Marketing Today": Rizwan currently lives in Pakistan, part of Southeast Asia, and is a growing market with a booming media industry. 1:45The Pakistani media industry has grown from less than $100M in advertising expenses to $550M in the last ten years. 2:30An accountant by education, Rizwan joined Mediacom on the finance side when he returned to Pakistan in 2004. 3:35In 2015, Rizwan started his media audit agency, Media Merchant. 5:10The ANA Transparency Report identified problems with the rebates received by the agencies based on advertiser money. 6:00Principal transactions came up in the ANA Transparency report, showing that agencies were buying inventory through holding companies. 6:50Agencies were found to be selling free inventory they received from the media houses to their marketing clients. 7:15Advertisers were found to be trusting agencies blindly, a failure on the part of the advertisers. 7:47Rizwan identified multiple problems that didn't come out in the ANA report. 8:15Media Buying Houses came into existence by providing the agencies with multiple suggestions that acted as a financial bomb. 9:20The agencies exploited the lack of connection between the advertising clients and the media outlets. 11:50While there are specific rules and regulations in different countries, this is still a problem all over the world. 12:24With media outlets being drained of their finances, their ability to create content is greatly affected. 14:30The relationship between the media and advertising industries the opposite of what it should be right now. 16:00 Hosted on Acast. See acast.com/privacy for more information.