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Independent contract review uncovered undisclosed rebates, opaque fee structures, and media buying practices that were eroding campaign performance and profitability.
This fast-growing online travel agency had scaled rapidly to £18 million in annual media spend, primarily managed by a full-service agency appointed during the startup phase. As the business matured, the marketing director began questioning whether they were receiving competitive terms and whether the agency was fully transparent about rebates and media buying practices.
Fuel Media conducted a rigorous 6-week independent review of all agency contracts, fee structures, media buying practices, and financial arrangements, including forensic analysis of media cost verification and rebate practices.
Our independent review uncovered significant transparency issues and financial irregularities that were directly impacting the client's ROI. The forensic analysis revealed that the agency was receiving volume rebates from multiple media vendors—including Google, Meta, and several programmatic exchanges—worth approximately £150,000 annually, which were not disclosed or passed through to the client despite contractual obligations. We discovered that the agency's trading desk was adding a 15% markup on programmatic media, which was not clearly disclosed in contracts or invoicing—this effectively meant the client was paying an additional £210,000 annually beyond the stated management fee. The analysis of actual media costs vs. reported costs showed systematic discrepancies: display CPMs reported at £4.50 were actually being purchased at £3.20, with the difference being retained by the agency. Video pre-roll campaigns showed similar patterns with reported CPMs of £12.00 but actual costs of £8.50. Creative production costs were being marked up by 40-60% beyond market rates—a simple social media video quoted at £8,500 could be produced independently for £3,200. The contract review revealed several problematic clauses: a fee structure that earned the agency 12% commission on all media spend (incentivising spend growth rather than efficiency); minimum spend commitments that locked the client into volume targets; and an auto-renewal clause that would have continued these terms for another three years. Perhaps most concerning, we found evidence that media buying decisions were being influenced by agency-publisher deals rather than client performance—certain publishers with agency holding company relationships received disproportionate budget allocation despite underperforming on ROAS. The performance analysis showed that campaigns optimised for volume metrics (clicks, impressions) delivered traffic but poor conversion quality, whilst the client's business model required optimisation for booking value and customer lifetime value. Our recommendations included: immediate renegotiation of agency contract with transparent, performance-aligned fee structure; mandatory disclosure and pass-through of all rebates and volume bonuses; removal of trading desk markup; independent verification of media costs; shift to in-housing of programmatic buying with agency providing strategic guidance only; competitive tender for creative production; and implementation of quarterly contract compliance reviews.
"We trusted our agency partner completely, which in hindsight was naïve. Fuel Media's independent review was genuinely shocking—£150K in undisclosed rebates, hidden markups, and media buying practices that clearly weren't in our best interest. The forensic detail and evidence they provided gave us the confidence to renegotiate our entire agency relationship. We've recovered significant costs, achieved better performance, and most importantly, we now have complete transparency and confidence in our media investment. This audit will save us over half a million pounds annually."
Week 1-2: Contract review and fee structure analysis
Week 3-4: Forensic media cost verification and rebate investigation
Week 5-6: Performance analysis, recommendations, and evidence compilation
Month 2-3: Agency renegotiation support and contract restructuring
Month 4: Implementation of new working practices and verification systems
Agency contracts should be reviewed and renegotiated as spend scales significantly
Undisclosed rebates are more common than many advertisers realise and can represent substantial hidden costs
Trading desk markups and platform fees should be explicitly detailed in contracts
Media buying decisions should be verified to ensure they're optimised for client outcomes, not agency relationships
Production cost transparency is essential—agencies often mark up external suppliers by 40-60%
Independent media cost verification should be conducted regularly, especially for programmatic campaigns
Fee structures should align agency incentives with client business outcomes, not media spend volume