Leo Burnett in Chicago, one of the world’s biggest ad agencies, has agreed to pay back $15.5m it overcharged the US army for working on its account from 2000-2005.
In this is $2.79m for two ‘whistleblowers’, Michelle Casey and Greg Hamilton, who worked at the agency then and decided to spill the beans.
Burnetts isn’t admitting liability though, CEO Tom Bernardin saying it has chosen to “agree to disagree.” Some disagreement.
These days agencies owned by big holding companies (Burnett is owned by French firm Publicis) are pressured to deliver the quarterly targets their quoted parents need to keep the shareholders happy and in and up and down business like advertising this is tricky.
In the old days they used to charge commission on the cost of placing the ads but this has now been overtaken by time charges, so beloved of the legal profession (one phone call, that’ll be an hour Sir).
But this is completely daft in advertising where a really good idea can come to you in a minute (if you’re clever enough) while a truly rotten one will take weeks to achieve its full uselessness.
I expect there’ll be a few clients around the world going back over old bills.