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Agency-customer relationship: OWM clarifies terms

Agency-customer relationship: OWM clarifies terms

Obviously, the organization of the advertisers in the Markenverband (OWM) and the organization of the media agencies in the GWA (OMG) do not come up with a common denominator in their discussion when it comes to the terms “own economic level”, “transparency” and “fair share”. The OWM has therefore published a thesis paper to explain its own view of things.

The association wants to create clarity in the discussion about the contractual regulations between advertising companies and media agencies. In the public discussion, these terms are sometimes misinterpreted and used. The OWM sees the media agencies primarily as consultants and service providers at the side of the advertiser. The agency is paid for this by the advertising company, and exclusively. Media agencies should not be remunerated by the media. Uwe Becker, chairman of the board of directors of the OWM: “Whether the agency can act as an ‘own business stage’ is determined by the bilateral agreements in the agency contract. However, if she wants to be both a consultant and a dealer, a conflict of interest may arise. A discussion about the term “own economic level” is completely obsolete in this context because it disguises this conflict of interest. The media agency has to decide on a role: Either it is an advisor on the side of the advertiser or it is a dealer. “

The term “transparency” does not mean – contrary to what is often shown – the general disclosure of all conditions of an agency to all of its customers. The OWM understands this exclusively as the transparency in the bilateral business relationship between the media agency and the advertising company. From the OWM’s point of view, the agencies are obliged to disclose to the respective advertiser all discounts or other advantages obtained with their money and to forward them to him in the contractually agreed scope. This also includes the so-called bundling or agency discounts. In addition, the often used term “fair share” is extremely misleading and has led to a lot of irritation. He should be abandoned, according to the OWM. The only thing that can be shared between the media agency and the advertiser is what the individual advertiser is entitled to. That is the share of the total discount volume that is proportionally allocated to the sales share of the respective advertiser. The agency can then only use discounts that may have been returned through a contractually agreed division to finance “special conditions” for other customers or in the context of new business projects.