When Honda Motor Co.’s U.S. operation said it was awarding media-buying duties to RPA in January, the company cited its desire “to return to a more consolidated structure” for its media, social and content creation as a reason for the move.
But it now appears that Honda’s switch from Mediavest Spark to RPA also was because of a lack of trust stemming from Mediavest’s handling of the automaker’s ad dollars, The Wall Street Journal reported.
Honda “learned of troubling alleged irregularities in how its account was handled, including that Mediavest wasn’t paying media companies within the expected period of time,” the newspaper reported Monday.
Honda, according to the report, “also found that money that was meant to pay bonuses to certain agency staffers on the Honda account didn’t get to them.”
Honda believed it was overcharged because of the way Mediavest “allocated personnel to certain work,” according to the report.
“Honda brought a few administrative issues to our attention nearly two years ago related to speed of vendor payments and distribution of bonuses to Honda team members. In no way did these rise to a level of improper business conduct or contract compliance. Nor did Honda ever raise any concerns regarding rebates or improper conduct,” Mediavest Spark said in a statement to Automotive News on Wednesday. “The administrative issues were very specific to Honda, but they clearly did not reflect the client’s wishes as to timing and protocol. We addressed these administrative concerns directly with Honda to their specifications.”
The agency added: “Trust, talent and transformation are the key tenets of our business. These are more than words -- it’s central to who we are and how we operate. We can always do better, and our goal is to deliver client satisfaction on all fronts.”
Changing media landscape
The development highlights the delicacy of relationships between marketers and agencies that must rely on trust in an increasingly complex digital world.
Honda declined to comment on the report. A spokesman said the automaker isn’t in a position to discuss the details of its business relationships.
Instead, Honda referred Automotive News to a January statement announcing the move in which the automaker said it was influenced by a “media landscape that is increasingly content, social and data driven” to consolidate its marketing operations.
RPA, which is also the Honda brand’s agency of record, lost its media agency role to Mediavest in 2013.
Tom Peyton, assistant vice president of marketing operations for American Honda, said in the statement that Honda expects its advertising to be more effective “with an agency placing content it creates.”
Honda said there are no changes to its lineup of creative agencies as American Honda continues its multiagency structure. RPA remains the creative agency for the Honda brand, Mullen is still the creative agency for Acura, and Muse Communications and Orci retain the multicultural assignments.
Advertiser/agency disconnect
The Association of National Advertisers has raised concerns about the disconnect between advertisers and their agencies.
An association spokesman pointed to an Association of National Advertisers report released last summer that said media agencies need to be fully transparent with clients “to elevate trust and restore confidence” in their partnerships.
Marketing analytics company Ebiquity gave a series of recommendations to ensure transparency in the association report.
One is to form a “uniform code of conduct between the advertisers and agencies.” The code would be “mutually agreed to, signed by both parties, and serve as an addendum to the master services agreement.”
Another recommendation was to “establish primacy over the client/agency relationship, and regularly re-evaluate and upgrade internal processes and practices.” The association report said it is “essential that marketers have a thorough understanding of the existing client/agency relationship and know when the agency is acting as an agent on behalf of the client or as a principal representing itself.”
The association said advertisers must rethink their media management practices.
Open communication among advertisers and their agencies can help the parties maintain trust, according to Alison Lohse, co-founder and COO of marketing analytics company Conversion Logic. These lines of communication are especially useful in the case of multi-year contracts that can quickly become outdated and may need restructuring if the needs of the marketer change.
An increasingly intricate digital marketing realm can present challenges.
“The complex and ever changing marketplace forces everyone to live on the bleeding edge to connect with consumers. It makes it problematic for marketers to project forward to the scope and support they will need in the lifetime of their contract with an agency, and almost impossible for agency to anticipate resourcing requirements,” Lohse said in emailed comments to Automotive News.
“The result is often a mismatched contract and an erosion of both trust and support when both parties feel like they are being cheated out of the original agreement.”
