撰写Industry attention on September 30 – In response to multiple media reports that "there was serious insider trading in the advertising digital media procurement business," the two advertising companies mentioned responded quickly. Omnicom Media Group said the above content was false and issued a lawyer’s letter to some websites.
Omnicom Media Group Lawyer’s Letter
The new company said it had reported the case and gave a "description of the situation that our company was maliciously slandered by relevant online remarks and caused huge negative impact". The statement mentioned that "the situation of advertising digital media procurement – |" and other articles maliciously slandered and fabricated false remarks on Omnicom Media, Xinhe Advertising and (subordinate business), saying that "the joint leadership of Xinhe pressured the senior management of Omnicom, and the three formed a 16 million kickback interest cooperation and kidnapping chain" and many other remarks were subjective speculation.
The statement also mentioned that the 2017 target is 1 billion yuan advertising partners invite tenders, macro alliance media is also invited to participate in the bid one of the enterprises, at this time the exposure of this confusing remarks, may affect the invite tenders when the evaluation of macro alliance enterprises, affecting the evaluation of the judges.
Previously, several media reported an anonymous whistleblower letter signed by "a professional advertiser", claiming to be an old employee from Omnicom Media Group. The whistleblower letter is titled "About, Advertising Digital Media Procurement", and the original text is as follows:
Regarding the procurement of advertising digital media
I am an old employee of Omnicom Media Group in charge of clients. I would like to give you some reactions on the situation of serving clients in the past three years. Expose a game played by French personnel.
Omnicom Group has been serving the group’s global business and domestic business for many years. In 2012, it lost its customers and was taken away by GroupM Media Group. In 2014, after Omnicom regained the client’s full-case agency, a lot of strange things happened in the industry. First of all, Xinhe Advertising and customer leaders found our service team and asked to subcontract all online media procurement business to Xinhe. We were under tremendous pressure from customer leaders, especially Marketing Minister Wu Shaoge and former Marketing Minister Mr. Zhang Yuguang directly found our general manager Zou Weibin, Doug Pearce and other business subcontracting requirements. It is said that they were given nearly 16 million rebates to form a cooperation chain.
Since then, we have also been known as a full-case agent for customers externally, but internally, without the guidance of professional and data strategies, we have allowed Xinhe Advertising to plan and buy completely from the perspective of profit. We have also lost the criteria of Omnicom as a 4A professional company, and have been kidnapped by Xinhe Advertising interests. We have served Dongbiao and Dongxue customers for the past three years. In fact, it is only traditional media business. The company’s profits and the income of team members have been greatly affected. I really understand why Xinhe and GroupM Media Group have only cooperated for more than a year. Because not only Omnicom, but also GroupM before was played between these people.
From 2013 to 2014, Zhang Yuguang and Wu Shaoge, the leaders of the customer marketing department, left one after another. Among them, Zhang Yuguang directly joined Xinhe Advertising Company as a senior deputy in 2015, directly leading Xinhe’s customer business. Since then, we have received customer instructions directly from the two new marketing ministers, Zhao Dandan and Sun Yiwen, to continue the original business cooperation method. It can be seen how tight this interest kidnapping is. And Wu Shaoge also returned recently, and it is said that he came specifically for this project.
In the process of business execution, the media often come to us to complain that there is a huge gap between the client’s media budget and the actual media execution budget. Under the new cooperation, the phenomenon of large and small media purchases has become the norm.
In the past three years, and a total of nearly 2 billion online media market investment, and from the market effect, the media is inefficient, but also led to the decline in sales of the two brands, which is not known how much media costs go into the sea. But according to the parent company of Xinhe Advertising, the listed company Lianchuang Energy Conservation (acquired Xinhe Advertising in 2015) disclosed data, Xinhe 2015 1.02 billion revenue, net profit reached 128 million, for a single customer advertising company with only such a profit is amazing, far beyond the industry profit indicators.
In the near future, there will be media invite tenders. According to internal statements, Xinhe and customer leaders are guaranteed to win this time by our Hongmeng. In order to prepare for the bid, Xinhe’s strategists have directly joined our strategy team, directly cutting the digital media strategy part. It is also to take advantage of the loopholes in the new rules in order to get everything they can. But from a professional advertising professional, it is impossible to tolerate such a corrupt situation of internal and external collusion to continue. Yes, it has become a joke in the industry. No matter who goes, it will definitely be Xinhe who will do the follow-up business in the end.
I implore the leaders of the group and Shenlong Company to pay attention and investigate this matter. I will also pay attention to the development of this matter and keep in touch with the media and the Discipline Inspection Commission. I hope that these two brands can really improve the media placement efficiency and promote market sales through this time!
A professional advertising man
Is the 16 million rebate true or false? Have all bidding companies become their extras? In response to this anonymous letter, the Hongmeng media and new advertising partners involved have issued lawyers’ letters to the industry to clarify that these reports are not true.
However, industry insiders do not buy this. In fact, "getting kickbacks" has been considered a normal phenomenon, and it has become an open "unspoken rule of the industry". Not long ago, there was also a report letter "**** China Marketing Director Cao Jie laundered money on a large scale, and the data was widely falsified". The report letter said that China Marketing Director Cao Jie took advantage of the trend of programmatic buying global digital marketing to collude with many P companies to accept bribes, fake data, and even fake packaging shelf companies as long-term P suppliers to launder money. After being informed, China Vice Sun Wei said that if the report letter was not signed, it should be a rumor. In the end, the matter was not settled.
China Marketing Director Cao Jie
Why is the marketing department of the manufacturer frequently exposed to scandals? It’s not because – "money"! Manufacturers’ annual market investment ranges from hundreds of millions to billions of yuan. In order to save time and improve efficiency, they usually take the form of publicly inviting tenders and find an advertising company for long-term cooperation. Although it is publicly inviting tenders, after all, the final power of life and death is still in the hands of the manufacturer, and the operating space here is too large. And the unspoken rules such as "rebates" mentioned earlier are born. Although unreasonable, it has always existed. According to industry insiders, the rebate for similar businesses can generally be as high as 10% or even higher. Perhaps this can also be interpreted from the side. Generally, the marketing department of the manufacturer changes its leadership, and the advertising companies that cooperate will also change.
Former Minister of Marketing Zhang Yuguang
Some industry insiders have joked that the biggest attraction in the advertising industry recently is the new year’s advertising, which has been surging and undercurrents are surging; the forces of all parties are at war; in fact, it is a farce. Looking back at the previous French car factories, it is nothing more than the redistribution of the interests of the French faction that came out with Zhang Yuguang and the OMC advertising company; the new joint advertising controlled by the French obtains the ultimate benefits.
However, the advertising company involved denied this claim.
The report letter mentioned that Dongbiao and Dongxue’s one-year advertising media cooperation target has been predetermined: "In the near future, we will conduct media invite tenders again. According to internal reports, Xinhe and customer leaders have guaranteed that we will win the invite tenders from Hongmeng. In order to prepare for the bid, Xinhe’s strategists have directly joined our strategy team, going directly to the digital media strategy part, and in order to take advantage of the new rules, so as to get it and use it for everything." Everyone can pay attention. If the next media cooperation target of Dongbiao and Dongxue is really Hongmeng, then the content of the report letter may not be groundless.
"In the past three years, the total is nearlyMore than 2 billionThe market investment of online media, and from the perspective of market effect, the inefficiency of media has also led to a decline in sales of the two brands. "The whistleblower letter also mentioned that a huge amount of advertising expenses were invested in three years, but from the perspective of effect, there was no corresponding return.
At a time when various manufacturers have set sales records in China, in August 2016, the sales of PSA’s two major brands in the Chinese market have plunged. The brand’s sales in China in August fell by 20.83% year-on-year to 21,381 units, and the brand’s sales in the Chinese market in August fell by 10.47% year-on-year to 17,018 units. In the first eight months of 2016, the global cumulative sales of PSA Group rose by 2.3% from 1,904,300 units last year to 1,949,000 units. On the premise of rising global sales, the sales in the Chinese market declined. In the first eight months, the group’s cumulative sales in China and sub-markets fell by 18.5% to 371,600 units.
Although sales were down, huge amounts of advertising money had been invested, and the term "media inefficiency" in the report letter was not excessive. According to iResearch, from January to April this year, it appeared in the top 10 list of online advertising for four consecutive months. The online advertising mentioned here is the "online media investment" mentioned in the report letter, that is, "digital media" procurement.
Data show that from January to April this year, the cost of online advertising was: 20.01 million yuan, 18.25 million yuan, 20.18 million yuan and 17.61 million yuan, respectively, ranked fifth, fifth, fourth and seventh in the month’s ranking, which is far from the sales volume and brand value in the industry. This can’t help but make people think, is the money not spent on the place where it should be spent, or is the service side insufficient?
In fact, it is not only amazing investment in online advertising, but also huge investment in traditional marketing activities. According to the public bidding website, in the bidding activities of "Hubei Sales Co., Ltd." "New Generation 308 Listing Series Activities", three companies entered the project to win the bidding candidates, and the lowest bid price was 10.741708 million yuan. This means that the listing activity of 308 on September 25 cost more than 10 million yuan on site.
Take a look at the bidding announcement in February this year, "2016" Motion · Sense "Brand Experience Action", there are three bidding candidates, of which the lowest bid is 27.20 million yuan;
This is just two of the many publicly invited tenders projects, plus other projects without publicly invited tenders, it is conceivable that the market investment is far more generous than that of ordinary manufacturers.
According to the sales data of manufacturers released by the Passenger Association, the sales volume in the first half of 2016 ranked 13th in the country, and the sales volume added was not even ranked in the top ten. In addition, one of the manufacturers with the most serious sales decline in the first half of 2016 was that the year-on-year decline was as high as 18.5%, and no one in the top 30 manufacturers could match it. This does not match its huge market investment.
I don’t know how much splash this insider trading report letter from Dongbiao and Dongxue will cause, and I don’t know if someone really wants to interfere with the results of invite tenders, but this invite tenders event has successfully attracted everyone’s attention, so let’s wait and see which company will win the bidding. The content of the report letter may not be true, but the "unspoken rules" described in the report letter are real. Believe it or not, similar things will continue to play out in a short time.
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