Toyota's Japan ad agency Dentsu to repay advertising overcharges
26 Septembre 2016 - Automotive News
Dentsu Inc. will pay an estimated 230 million yen ($2.3 million) back to customers, including Toyota Motor Corp., that it overcharged for Internet advertisements in a case likely to stoke concern that digital media transactions have lacked transparency.
Japan's largest ad agency investigated transactions going back as far as November 2012 and uncovered 633 suspicious cases affecting 111 advertisers, including 14 examples where fees were charged and no placement had been made, Dentsu said in a statement. The company apologized and said business results would probably not be materially affected.
"We will repay the 230 million yen, and we will talk with clients after all the facts are disclosed," Toshihiro Yamamoto, Dentsu senior vice president, told reporters in Tokyo on Friday.
Toyota was the first to point out a discrepancy, Shoichi Nakamoto, Dentsu's CFO, said at the press briefing.
Dentsu shares fell earlier in the day after a report in the Financial Times that the company had talks with more than 100 companies to discuss possible overcharging cases. The meetings come amid a simmering dispute in the $600 billion global ad market after an industrywide U.S. study that showed a lack of transparency in how media space is priced.
The Dentsu irregularities included discrepancies in advertising placement periods, failure of placement and false reporting regarding performance of the advertising, according to the company's statement Friday. Also, some invoices did not reflect actual results, resulting in overcharges. The company intends to clarify the causes leading to the inappropriate handling of ads and to report on progress of its measures by the end of the year.
"Immediately after finding out about the incidents, we organized an internal investigation team in the middle of August," the company said. Advertising verification, placement, publication and billing was transferred to a separate section from the one involved in inappropriately handling ads, the company said, calling the step an "interim measure."
Dentsu is holding talks with more than 100 clients on the overcharging, the Financial Times reported Sept. 21, citing advertising executives in Tokyo it didn't identify. Sept. 22 was a national holiday in Japan.
Toyota has been notified by Dentsu of irregularities in some digital media business transactions, a representative of the carmaker said in an e-mailed statement, without further details.
The 58-page study, performed by investigative firm K2 Intelligence, doesn't identify ad agencies or clients or lay out the size of rebates the firms allegedly retained.
But in general, it said, such rebates ranged from 1.67 percent to 20 percent of aggregate media spending.