The glut of staff that exited MediaCom last week is thought to be related to the agency overcharging some of its top clients, Foxtel and KFC.
Yesterday AdNews reported that up to 10 key MediaCom investment and trading executives, of which the figure may now be higher, had recently left the company.
Industry conjecture had scenarios for the exodus ranging from sackings and walkouts to resignations. It is thought that after one sacking, and one suspension, that this then led to other staff members resigning in protest.
It has now emerged the company had overcharged at least two clients by giving exaggerated claims on the TV audiences its campaigns had delivered. The clients are understood to be Foxtel and Yum! Brands food giant, which owns brands such as KFC and Pizza Hut.
Mark Pejic confirmed to AdNews that an investigation is underway. There is no suggestion at present that the overcharging of clients goes beyond MediaCom to the wider GroupM agencies, but industry sources close to the matter who wished to remain anonymous, have suggested that it's likely to be an industry-wide issue.
Pejic wouldn’t be drawn on how long the alleged overcharging might have been going on for, or whether any further staff might leave as a result.
He told AdNews: “It’s confined to a small number of clients in the Sydney office only. We’re confident of that. We have brought in not only group auditors form overseas but also engaged with an external third party auditor.”
Mumbrella reported last night that the overcharging or inaccurate figures were not intended to deliberately cause any financially disadvantage to clients, but an investigation is underway and the full extent of the issue is not yet clear.
Foxtel marketing director Ed Smith declined to comment on the issue of overcharging. He told AdNews: “In the fullness of time when we understand everything would be happy to talk about it but at the moment there’s a lot being worked out and a lot that is unknown."
AdNews is awaiting comment from Yum! Brands.
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