Kickbacks behind the clicks: Who really benefits from the advertiser’s ₹100?

Every time a brand signs off a digital media budget, a simple question goes unasked in the boardroom: of every ₹100 spent, how much actually buys media that a real human being sees — and how much quietly disappears into a maze of margins, rebates, resellers and "commercial arrangements" that nobody puts on a slide?

That question is now forcing its way to the centre of India's advertising industry, as executives and observers begin scrutinising not just outright ad fraud, but a murkier, more uncomfortable layer beneath it — undisclosed margins, kickback-like commissions, rebates, preferential pricing and free inventory flowing between agencies, ad-tech platforms and publishers, often invisible to the advertiser footing the bill.

This is no longer a story about bots and fake clicks alone. It is a story about incentives — and about who really benefits when a client's money moves through the programmatic supply chain.

An ethical failure, not just a technical one

Sandeep Goyal, Chairman of Rediffusion, does not mince words about what is at stake. "Ad fraud is a reality which few want to face up to," he said. "We won't go into the mechanics of it — that is pretty well known. It is the ethical part of it that is worrisome. Ad fraud isn't just theft, it's ethical failure. It drains client money meant for real reach, misleads with fake metrics, funds fake news sites, and betrays trust."

Goyal's warning cuts to the heart of the problem: agencies that look away from fraudulent activity in their supply chain aren't merely negligent — they may be quietly profiting from deception, at the direct expense of the clients who trust them to spend their money wisely.

A single programmatic ad buy can pass through an advertiser, its media agency, a trading desk, a demand-side platform, an ad exchange, a supply-side platform, a reseller, a data provider and finally a publisher — before an ad ever loads on a screen. 

At the end of that chain, the client typically sees a campaign report: CPM, CPC, conversions, reach. What it doesn't see is the economics of every layer sitting between its brand and the consumer.

None of this is illegal on its own. Agencies can legitimately buy media as principals and earn a margin. Ad-tech platforms can legitimately offer volume rebates. The trouble starts when an agency behaves — and bills — as if it is purely the client's agent, while quietly pocketing an undisclosed margin somewhere in the pipeline it never has to explain.

The uncomfortable arithmetic of cheap agency fees

India's ad market is brutally price-competitive, and agency pitches routinely turn into a race to the bottom on fees. That should worry, not reassure, procurement teams. If an agency is willing to manage a large annual account for next to nothing, where is it actually making its money?

Chetna Negandhi, Group Director at Gozoop Creative, frames this diplomatically but doesn't dodge the underlying tension. 

"Rather than speculating on how individual businesses manage that pressure, it's fair to say advertisers benefit from evaluating value holistically, considering expertise, service quality and long-term outcomes alongside fee levels," she said.

She added that sustainable fees support better-resourced work, and that the real cost of an engagement only becomes clear through "direct, transparent discussions and clearly documented commercial terms."

Translation for the brand's CFO: a rock-bottom management fee is not a bargain. It's a question mark.

Kickbacks rarely look like kickbacks

The most dangerous commercial benefits in this industry don't arrive as a cheque marked "commission." They show up as preferential pricing, bonus impressions, free inventory, technology credits or "make-goods" for underperforming campaigns — mechanisms that are standard practice but whose benefits often stay locked inside the agency ecosystem instead of flowing back to the client who generated the volume in the first place.

The critical, unanswered question: when an agency negotiates a rebate on the back of its clients' collective spending power, does that value ever reach the advertiser — or does it vanish into the agency's own books?

The race for the cheapest click — and why cheap can be a trap

Because campaigns are judged on efficiency metrics — a ₹20 CPC looks better than a ₹40 CPC on any dashboard — there's a built-in incentive to chase cheap inventory over quality inventory, even when that cheap inventory is loaded with invalid traffic or sits in low-value environments. 

Add ad arbitrage into the mix, where inventory is bought cheap and resold at a markup through additional, invisible layers, and the "efficient" campaign can turn out to be the most inefficient one of all.

Kunal Kothari, Chairman, Founder & COO of Mobavenue AI Tech Limited, doesn't deny that rebates and service credits are baked into the open-market ecosystem — but he draws a hard line on where that stops being acceptable. 

"Operating on the RTB model through open auction, we prioritise direct inventory relationships wherever possible and stay cautious about how inventory is sourced across the chain," he said.

He insisting that legitimate optimisation must be clearly separated from "excessive reselling, ad arbitrage and made-for-advertising inventory" that compromises media quality — with fraud-prevention tools at the bidder level treated as non-negotiable.

Whose side is the agency really on?

The sharpest conflict emerges when an agency has its own commercial relationship with the very tech platform it is recommending to a client. Was that supply path chosen because it delivers the best outcome for the brand — or the best return for the agency? 

With multiple group entities often handling trading, data and technology across borders, inter-company charges and central-service fees can bury the answer even deeper.

Kothari argues the fix is structural, not cosmetic: "Advertisers should have sufficient visibility into where their money is being spent and the quality and economics of the media being purchased," he said, calling for greater transparency around spending, pricing and inventory to rebuild trust in the ecosystem.

Follow the ₹100. How much bought real media? How much went to the DSP, SSP, exchange or reseller? Were rebates generated — and for whom? If the industry cannot answer that question in plain commercial language, the problem isn't bots. 

It's incentives — and until agencies, ad-tech platforms and advertisers are willing to open the books, India's digital ad economy will keep rewarding whoever hides the margin best, not whoever delivers the best result.