Foxtel $50M Subscription Advertising Subject To Audit After Agency Overcharging Saga
According to Mumbrella Foxtel auditors uncovered the overcharging which has resulted in 12 people quitting and one being suspended.
Also involved in the overcharging saga is Yum Brands who spends up to $44M with Mediacom across the Pizza Hut and KFC brands.
Mumbrella claims that Mediacom is facing a major challenge to its reputation with other clients now set to call in their auditors to investigate inflated TV audience claims.
One member of staff has been fired, another suspended and 11 have resigned over the affair which involves its clients Foxtel and Yum Brands.
Sources have told ChannelNews that Foxtel called in external auditors after discovering irregularities in the way that they had been billed.
The external auditors ‘reported discrepancies’ in the reports on TV audiences submitted to the advertisers.
Mumbrella said there is no suggestion that Mediacom CEO Mark Pejic was aware of the inflated claims before they came to light. Mumbrella also does not suggest that the inaccurate figures were intended to deliberately financially disadvantage the clients.
Pejic told Mumbrella “We’ve identified reporting discrepancies relating to one distinct area, which is television ratings, in a small number of our Sydney based clients.
Foxtel’s chief marketing officer Ed Smith told Mumbrella: “Foxtel, as a result of its audit processes has uncovered some issues at Mediacom that we are working through with Mediacom and GroupM.”
Smith declined to comment on Foxtel’s future relationship with the agency
Among those understood to have resigned are Jane Henderson, head of implementation planning and investment, Henderson previously worked for Mitchell Partners and Zenith Media.
Also gone is Englishman Ashley Earnshaw, the head of content and partnerships.
Pejic said “The key thing is we identified the issue with regards to television ratings. How did we do that? Because we do spot checks in our business,” he said, while also confirming external auditors would be called in to review the accounts.
“We took responsibility and moved very fast. We did not sit on this and I am definitely using this as an opportunity to ensure that this area gets better very very quickly.”