Ron Sneddon
14 Apr 2026 · 5 min read
Most NZ advertisers have no idea their agency earns money on their buy. Here's exactly how it works — and what to ask about it.
Volume rebates are payments that media owners make to agencies based on the total amount of media an agency buys across all its clients. The agency earns more from a media owner when it directs more client spend there.
This is not inherently illegal. But it creates a structural conflict of interest that most advertisers don't know exists.
How the math works
Imagine your agency buys $10M in TV across its entire client base. At 3% rebate, that's $300,000 back to the agency — money that never appears on your invoice, never reduces your rate, and never gets disclosed unless you ask specifically.
Now imagine that same agency has a choice between recommending TV and digital display for your campaign. TV hits the rebate threshold. Display doesn't. Which do you think gets recommended more often?
What this means for your plan
I'm not saying your agency is corrupt. Most of the people involved genuinely believe they're recommending the right media. But the incentive system creates a bias that operates below the level of conscious decision-making.
The question isn't whether your agency is bad. The question is whether the structure of your agency relationship lets you know when bias might be happening.
What to ask
Ask your agency directly: "Do you receive any form of volume rebate, investment credit, or soft-dollar benefit from any media owner you recommend to us?" Get the answer in writing.
If the answer is yes, ask for a full disclosure of which media owners pay rebates and at what rate. Then ask how those relationships are managed when making recommendations on your account.
The answer you get — and how comfortable the conversation feels — will tell you a lot.
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