If you have been following the news closely in the past year you’ll know that corruption and scandal are filling the airtime. Although the corruption usually deals with politics advertising is the latest industry to suffer from this issue. To stop the corruption from getting out of hand the U..S has began a thorough investigation into the ins-and-outs of the 4 largest advertising groups. Because of this many companies have began changing their mode of operations as the pressure of investigations as intensified.
Many agencies are built on practices that have become common that may not be very ethical. For instance, in Brazil, agencies routinely use a device called agency discount. Using this device agencies receive payment from the media by way of bonuses when they advertise. This close relationship between advertisers and the media can leave a grey area for unethical actions.
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Another big problem is volume bonus also known as media BV. In short, media BV occurs when the media deals out periodic payments to the agencies that hire them. Now the problem with this is it comes with two major risks according to fagali.com. The first contradicts free competition and Second has to do with favoritism. Vehicles that pay heavier Bvs stand a high chance of being favored.
This discussion involving agencies doesn’t seem to be going away anytime soon. For example, the English WPP isn’t even above scrutiny as it has had 3 of its subsidiaries investigated and it is the largest advertising group in the world.
About Bruno Fagali
Bruno Fagali is a Brazilian based attorney who specializes in various legal issues including administrative law, regulatory law, and ethics just to name a few. He has become one of the most respected attorneys in Brazil’s legal system. In 2016, He founded his own practice the Fagali Law Firm. Prior to owning his own practice Fagali worked for several different law firms in different capacities.
He founded his law firm primarily to take on matters like corruption. His efforts in anti-corruption along with others led to regulatory reforms in 2013.