An investigation into collapsed ad agency Ambient Advertising heads to the NSW Supreme Court on Monday where former directors, employees and related parties will be cross-examined about allegations the outdoor specialist deliberately and systematically overcharged clients and media agencies over a number years.
The cross-examination is being led by NSW Supreme Court-appointed special purpose liquidator Nicholas Crouch of Crouch Amirbeaggi. He has spent months gathering evidence that suggests a majority of clients and media agencies that used Ambient Advertising may have paid for phantom advertising – street posters that were ordered by clients but never delivered.
AdNews has seen a handful of cases where media agencies from Dentsu Aegis Network, GroupM, Publicis Media and more were left short changed. In some of the more extreme cases, Ambient Advertising trimmed orders by more than 50%.
“It’s clear to us that the advertising agencies have been charged for services that were not rendered. We’re still trying to determine who is responsible for that behaviour…it’s too early for us to conclusively say who that may be,” Crouch tells AdNews.
“The clients and ad agencies are innocent in this. It’s very difficult to detect which is why it was probably going on for years."
The investigation took a random sample of 100 contracts for street media advertising through Ambient Advertising.
“In those 100 contracts, 80% of them had transactions which indicated that the clients had not received what they paid for. This was usually a 20% trim to their order,” Crouch explains.
About 60% of Ambient Advertising’s revenue comes from street media sales. It is one of five areas being investigated to establish events that may have contributed to Ambient Advertising entering voluntary liquidation in 2014.
These include an investment into a New Zealand company Titan Media Group, management fee payments worth $6 million to Ambient Advertising directors, and the transfer of Ambient Advertising assets and contracts into a new advertising business set up prior to liquidation.
Mark Fishwick, a well-known ad man, founded Titan Media Group, Ambient Advertising and is group chairman of Revolution 360.
After Ambient Advertising liquidated, several staff members were offered roles at Revolution 360.
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