Media and advertising agencies thrive on partnerships. When they work well together, brands flourish, campaigns dazzle, and audiences engage. However, when these partnerships slip into collusion, the results are far from progressive, ethical, or transparent.
In an industry where numbers rule, bigger campaigns are often mistaken for better ones. Shrinking margins push agencies and media houses to prioritise scale over substance. Senior talent costs soar, adding more pressure to deliver results while justifying their roles. This relentless pursuit of revenue leaves little room for ethical considerations. Something has to give. And often, it’s morality and fair practice.
The Industry’s Unspoken Secrets
Most players in the media and advertising business know that the system isn’t perfect. Audits are rare, monitoring is patchy, and reporting standards are inconsistent. When scrutiny is weak, the temptation to take shortcuts grows. It’s not to say that malpractice doesn’t happen under watchful eyes, but lax oversight certainly makes it easier.
The recent Competition Commission of India (CCI) raids on major media agencies—GroupM, Publicis, Dentsu, Interpublic Group (IPG), Indian Broadcasting and Digital Foundation (IBDF), and the Indian Society of Advertisers (ISA) in Mumbai, Delhi, and Gurugram—have reignited old industry whispers. Were these agencies engaged in unfair practices? Were rates being manipulated? In such a case, Were advertisers paying more than they should?
While the investigations are ongoing, one thing is certain: there’s no smoke without some fire. Conversations in industry circles have long suggested irregularities. Now, those rumours are under official scrutiny.
The Endless Cycle of Accountability Questions
We’ve seen this before—questions over viewership ratings, debates over inflated digital ad reach, and concerns over double counting on television and digital platforms. The industry is full of paradoxes. Brands demand accountability, but they also chase the very platforms that promise inflated numbers. The famous line, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half,” rings truer than ever.
Despite the waste and opacity, advertising has always been quick to adapt. The industry adjusts to new realities, including economic downturns, digital shifts, or regulatory pressures. It has also adapted to the lack of trustworthy data for media selection. But, sure enough, it would also find new ways to game the system. That is the nature of the business.
Who Pulled the Trigger?
The timing of these raids is intriguing. Were they triggered by a disgruntled advertiser or a rival agency? Did a whistleblower push the CCI into action? Or is there a deeper political undercurrent? Theories abound, and until concrete evidence emerges, speculation will continue.
However, one critical question remains: Why now? The advertising industry has been operating in a grey zone for years. Why did it take so long for regulatory action?
Trust in the Age of Influence
Ironically, as the industry expands, transparency has declined. With fewer independent audits and weaker regulatory checks, brands increasingly rely on ‘experts’ whose advice may be biased or manipulated. When crores are at stake, the temptation to misrepresent numbers is high. What starts as a ‘harmless’ rate negotiation can morph into full-fledged price-fixing or kickback arrangements.
These practices don’t always violate laws outright. They operate in the shadows of legal frameworks, much like tax planning that skirts the fine line between avoidance and evasion.
The Bigger Question: What’s Next?
The CCI’s investigation reportedly centres around alleged collusion in setting advertising rates and discount structures. Whether or not a cartel existed, industry insiders acknowledge that media agencies have long employed tactics like block deals, volume-based discounts, and incentive structures that benefit a select few. Some of these practices are accepted norms, but where do legitimate business strategies end and anti-competitive behaviour begin?
If these allegations hold, the penalties will be severe. A potential fine of 10% of revenue in an industry where margins barely cross 0.5%, or three times the profit, could spell doom for smaller firms. Even major players will feel the shockwaves.
A Wake-Up Call for the Industry
Regardless of the outcome, this is a moment of reckoning for advertisers, agencies, and media houses. It will likely reshape the business landscape, forcing increased transparency in media buying and financial dealings. Contracts may become more detailed, independent audits might gain prominence, and rating agencies may face new accountability standards.
The advertising industry has always thrived on reinvention. If the CCI probe leads to cleaner practices, it will only strengthen trust in the ecosystem. Until then, the industry will hold its breath, waiting to see whether this storm is a passing cloud or the start of a major reset.
First published in Free Press Journal.
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