Japanese ad giant admits to overcharging more than 100 clients

Tokyo-based advertising giant Dentsu has acknowledged that it overcharged more than 100 clients after it conducted a month-long investigation into its own financial records.

The probe turned up at total of 633 business transactions that warranted suspicion -- worth about $2.3 million overall.

SEE ALSO:Why American ad agencies are being accused of having secret agendas

In some cases, its agency properties charged fees for ads that were never placed. There were also instances in which a campaign's performance was exaggerated in order to hike up the price.

It's not clear which of Dentsu's clients were affected, but the holding company said in a statement that it had contacted and apologized to each of them. It also vowed to refund the sum in full.

Most of the dubious dealings -- which the company refers to as "inappropriate operations" -- centered on Dentsu's digital ads business.

The company is responding by setting up a separate group to bring more independent oversight to the process.

"In order to ensure that human errors or inappropriate operations in digital advertising will be prevented and detected, in early September we transferred operations to verify the specifics of advertising placements, publications and billing to a separate section which is independent from the section previously responsible for such operations," a spokesperson said in a statement.

Dentsu said it found no evidence that its overall business performance was affected by the irregularities.

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The company launched its investigation in mid-August, not long after America's biggest advertiser trade group, the Association of National Advertisers, published a study accusing U.S. ad agencies of using secret business arrangements like "rebates" to sweeten deals without clients' knowledge.

While American ad execs have sworn off such dealings, surveys show these arrangements are common practice in other parts of the world, including Japan and China, which boasts the highest level of rebates.

A report from an international brand trade group, the World Federation of Advertisers, found the Chinese and Japanese ad markets to have some of the lowest levels of transparency in the world.

The ANA's report also highlighted the many conflicts of interests that have arisen as the global advertising industry has consolidated into just a handful of holding companies.

Dentsu, which owns a mix of media properties, media buying agencies, media wholesalers and creative outfits at every level of the advertising assembly line, is much more prone to these entanglements.

"[It's] not a set-up which lends itself well to transparency," the WFA's researchers wrote in its 2014 report.

The inefficiency these incentives may create always comes at the expense of the clients, who ultimately foot the bill.

The admission came after an Australian ad trade began reporting on over-billing at Toyota, one of Dentsu's biggest clients. Japanese media soon picked up the story, causing Dentsu's stock to dip, and the holding company was forced into a mea culpa.

"We sincerely apologize to our esteemed advertisers, the parties concerned and our shareholders from the bottom of our hearts for causing concern and trouble," a Dentsu spokesperson wrote.

The company said Friday's release included just its preliminary findings; it plans to continue the investigation in months to come.

(责任编辑：行业动态)