Federal prosecutors have reportedly issued subpoenas to ad agencies

Neil Hall/Reuters

• Federal prosecutors investigating media-buying
  practices in the ad industry have begun issuing subpoenas as
  part of the probe, according to the Wall Street
  Journal.
• One ad agency under scrutiny in the investigation is
  media conglomerate Vivendi-owned Havas, reports WSJ.
• The investigation involves
  the FBI looking at the ad industry’s media-buying
  practices including accusations of agencies receiving rebates
  from media outlets.

Federal prosecutors investigating media-buying practices in the
ad industry have begun issuing subpoenas as part of the probe,
the Wall Street Journal reported Thursday, citing people familiar
with the matter.

The investigation, which was
first reported by trade magazine Campaign
in June, involves the FBI examining the ad industry’s
media-buying practices including agencies receiving rebates from
media outlets.

One ad agency under scrutiny in the investigation is media
conglomerate Vivendi-owned Havas, according to the
Journal. A spokeswoman for Omnicom told the Journal that the
firm hasn’t received a subpoena from federal prosecutors.

The entire media buying industry has been under heavy scrutiny
for several years

The issue of non-transparent media buying has been thrust into
the spotlight since 2016, when
a bombshell report by the Association of National Advertisers
(ANA) revealed that rebates and other
non-transparent practices were “pervasive” in the US.

The report didn’t name any specific media agencies, and most of
them shrugged and broadly denied wrongdoing when it was released.

Rebates, bonuses and discounts are a common business practice in
some parts of the world, including Europe, China and Brazil, but
haven’t historically been a part of US deals.

Business Insider reached out to a Havas representative for
comment but had not heard back at the time of publication. 

Meanwhile, media agencies continue to face tremendous
pressure as their business models come under threat
with many clients including consumer packaged goods giant
P&G pushing for greater transparency and cutting back on ad
fees. Several brands have even started to take ad processes
in-house.