Drugi jezik na kojem je dostupan ovaj članak: Bosnian
By: Ekrem Dupanović, firstname.lastname@example.org
A scandal is emerging in Slovenia that could potentially bear a heavy cost for the advertising industry. And not only Slovenia. Several media agencies from the region bought media space in Slovenia for their regional and global customers through the agency Media Publikum, which RTV Slovenia, according to the Ljubljana daily Dnevnik, accused of forging invoices. Apparently, Media Publikum delivered to its clients invoices that were up to 70 percent greater than those issued by RTV Slovenia. It’s widely known that there have been scams in the media business before. There were cases of double invoices issued by the media to media agencies – one for the agency, and another for the client. There were deals between the media and media agencies behind clients’ back. There were deals “under the table”. But there were never so brazen and criminal frauds like this. I know a lot of things. All sorts of information reach me every day. But I really never heard of something like this. I honestly hope that this is all a mistake, and that it will turn out that it was all invented by someone who wanted to harm Media Publikum (new Gibraltar). If that turns out in the end, I will be the first to publicly apologize to Mr. Klarič, although we only transferred what Slovenian Dnevnik published. But if it’s true, then Media Publikum really has no place in this business anymore.
Let’s go back to the very beginning of the media business. Work in advertising was launched in the early twentieth century by media agencies which bought advertising space from the media, and sold it to advertisers. For this, they received 15 percent commission from the media. All was public and transparent. It was a good business. An agency in the US which would buy $100 million worth of media space a year could earn $15 million. That’s a lot of money. In order to motivate advertisers who didn’t have the creative, to buy as much space, media agencies started to offer creative solutions as an added value, meaning free (even today many agencies offer free creative at pitches in order to receive media budget from which they then charge for the creative). Business was booming. Television appeared, so for the sale of television time agencies started to offer their clients recording of television spots, linking them to production companies. Of course, for this work they charged a commission from production companies. It all went on like that until the end of the last century. The entire business was based on the 15% commissions paid by the media to the agencies.
There were various methods of doing things. While I led the team for sports marketing at Sarajevo agency OSSA (’85 -’90), we would purchase all the commercial time in broadcasts of major sporting events from individual national television stations, and then sold it to our clients. Let’s say the Zagreb Television is broadcasting Roland Garros or Wimbledon. We would buy up all available commercial time during the broadcast which was taken over by all the other TV stations that were members of the public broadcasting pool. After this we would form our pricelist and send out offers. We mostly bought big tennis tournaments in which Monika Seleš participated, because back then we were running her sponsorship, and she was the first female racket of the world. Times were good for everyone. With a single contract the TV station would resolve everything, it would get the budget for expenses and would profit. Clients were able to buy the time slots with which they would cover the whole Yugoslav market, and they could do it in one place, without the need to go from one television to another.
The last such contract I signed was in late 1990, and it was for all the rights in the broadcast of the Athletics World Championship Tokyo 91. The contract was signed in the ceremonial lounge of the hotel Holiday Inn in Sarajevo. By then the unity of the media market had already been shaken, so I asked that each of the television stations put their signature on the contract (broadcasters of the six republics and two provinces), as well as the director of the public broadcasting pool. So nine signatures, and nine seals. Value of the contract was $500,000 net. 26 years ago it was much more money than it is today. And we had to make some money as well (at least the same amount J). In Zagreb we made a promo tape of 6 minutes in which we shown to advertisers all possible positions for airing commercials during the transmission. Unfortunately, this project was not realized at the end. We sold-out all the air space, but the championship was in August 91, and Slovenia left Yugoslavia in June, then the war transferred to Croatia, and that was the end of the Yugoslav television.
In the early nineties of the last century clients started complaining about the 15% commission, demanding a change of roles, and that they be the ones who will buy ad space and receive media discounts. This practice first started in Europe, but later transferred to the United States. Agencies rapidly changed their tune and threw themselves into the arms of clients. They started to work media plans for them and buy media space on their behalf. The media were blind to the trap they were heading for, and in which they find themselves today. Budgets were growing, and with them the greed of advertisers who demanded ever bigger discounts from the media. Agency commission reduced. Instead of the 15% which they used to receive from the media, the percentage came down to 3-5 percent, which is how much the advertisers are now willing to pay. The new pressure on the media came from the media pools. Agencies team up in pools, forming larger budgets to flaunt in front of media noses, asking more and more. Discounts, especially on television, are reaching abnormal amounts. Up to 70%! And even when a media sells the ad space under such conditions, they have to wait from three to six months for their invoices to be paid. The bigger the advertiser, the harder the collection and longer the wait.
The media today are owed the most by the largest companies. Greed of the advertisers is limitless. And this is destroying the media. Advertisers have pushed most of the media into the hands of politicians, rulers who use taxpayers’ money to buy the loyalty of the media. Thus advertisers are working in favor of their own demise. They allow politicians to rule the masses, to sow confusion, spread fear and uncertainty. This harms the market, and therefore the advertisers who sell less of their products and services than they could sell if the optimism, satisfaction and faith in a better future ruled among the people. The safest sources of income for media today are the prime ministers of countries in the region and ministers in charge of the media. One day, when the politicians give up on the media and close their oxygen pipes from the state budgets, the media scene will simply shut down. Advertisers will no longer have anywhere to advertise, and they’ll need it. But by then it will be too late for any serious discussions.
Still, not all as black as it looks. There are media agencies in the region that do their work professionally, not asking for duplicate invoices from the media, nor falsifying them. If it is proved that Media Publikum really ‘tweaked’ the invoices, all of them will lose face, and the whole profession will be at a loss. Therefore, it is very important that now we hear from the agencies that bought media space in Slovenia from Media Publikum. Did they know of the dishonest deeds and did they partake in them? I know that no one will come forth. They’re not crazy to say publicly: Yes, it’s true, we did it together. But if they didn’t, they have to say it, and the sooner the better. And they have to say it loudly, for all to hear. Slovenian Advertising Chamber has already issued a public statement condemning the criminal actions, if any (even the Chamber hopes that this did not happen). This should also be addressed by the national associations that are responsible for self-regulation of markets and the regulation of relations among all participants in the advertising business. This is much more important than a 10% discount on the registration fee for members, which was the only thing that the national associations agree on at the recent meeting in Belgrade. If they really want to be serious players and to bring the industry into line, then it’s time for a crisis meeting and an agreement on immediate steps to solve these and similar problems.
If it is proven that Media Publikum so brazenly stole money from advertisers, then the profession has fell to the very bottom from which it will be difficult to return to the surface. And I will be ashamed that I had spent 46 years of my life living under the delusion that I work in the creatively most exciting profession in the world.
1 August, 2016.