Is IMP Group in Israel Ripping off the Public?

(TJVNEWS.COM)

In the economic maelstrom that has resulted due to the deleterious consequences of the coronavirus pandemic, businesses throughout the world have not only been adversely affected but a significant percentage have shuttered their doors on a permanent basis. This also applies to non-profit organizations, charitable institutions, schools as well as small businesses, and especially those who are focused on serving the needs of Jewish communities in New York and around the globe.

When Jewish non-profits, whether they be based in Israel or elsewhere wish to launch advertising campaigns in order to generate revenue for the scores of needy people that they help, they are often compelled to seek assistance from ad agencies who charge them exorbitant commissions.

One such operation which is based in Israel is known as IMP Media (International Media & Promotion).  According to their web site, IMP has been in operation for over 35 years and they claim that they have been “helping companies, particularly in Israel, move beyond their natural geographic and linguistic reach.” They also assert that they are involved in “synchronizing brand marketing efforts to most effectively reach Jewish and niche audiences, including digital and content marketing.”

They also describe themselves as a “marketing force spanning the entire publication spectrum, mainstream as well as Jewish, from the New York Times to the Jewish Chronicle. IMP’s in-house technical and creative teams take the meaning from your message to create campaigns that speak directly to your target audience.”

Sources close to IMP who have spoken to the Jewish Voice on the condition of anonymity have revealed that IMP has consistently posited themselves as the “go to” agency for non-profits, charities, and small businesses who wish to advertise in publications, and electronic media in the United States, Britain and beyond.

For those seeking their assistance, IMP not only charges a hefty commission of anywhere between 30 and 45 percent to the non-profits who are struggling to stay afloat, but the agency compels their clients to sign an exclusive contract with them. This essentially translates into a monopolistic venture that is bent on raking in enormous profits from those who can least afford it. The IMP contract makes it obligatory from a legal standpoint for clients who seek advertising in the United States to deal exclusively with them at such an astronomical rate that has been described by some in the industry as “highway robbery.” Apparently, IMP has a monopoly on the market and clients are strictly prohibited from dealing directly with media outlets, so that they can circumvent the outrageous commissions that they are being charged.

It has also become clear that the media outlets themselves up until this point had hashed out a lucrative deal with IMP, so both parties profit on the backs of those organizations and charities who subsist on the largesse of donors.

This egregious situation leaves non-profits, charities & advertisers with no alternative but to pony up money that they do not have in order to slake the avarice of an agency with a clear cut agenda. Representatives of non-profits and charities as well as those who work directly with donors have voiced their concerns over these contractual obligations. It should be noted that many of the aforementioned wish to avoid the “middle man” and initiate more reasonable advertising terms directly with publications.

For their own part, media outlets in the US have incrementally began to withdraw from agencies such as IMP and are seeking to expand their own marketing departments in order to attract customers such as non-profits, charities and others of that genre.

One person who is familiar with the workings of IMP told the Jewish Voice that “non-profits and other businesses really didn’t have much of a choice when considering advertising campaigns in Jewish media companies in the US and elsewhere. In Israel it used to be extraordinarily cumbersome to engage in international monetary transactions. The non-profits and charities were told by IMP that it would be way less complicated for them to just remit payment for their services and they will take care of sending the money to the US based Jewish newspapers, radio stations, etc. Things are totally different now with the advent of online money exchanges and frankly, there is no reason why any non-profit has to be beholden to one particular ad agency for their advertising needs.”

The owners of IMP are Nachum and Shosh Katz, along with their son, Gidon.  Some years ago, when he originally met the owners of IMP while on a visit to Jerusalem, Jewish Voice publisher David Ben Hooren was offered a business proposal by the media company owners. Mr. Ben Hooren declined the offer as he was told there would be a 45% commission charge involved. That fee was broken down for him as 20% going for agency commission and 25% earmarked for public relations.   On another occasion Mrs. Katz told Mr. Ben-Hooren that their commission rate was 30%.

In a February 24, 2020 e-mail response to an inquiry placed by Mr. Ben-Hooren concerning commission rate structure at IPM, Shosh Katz, the co-founder and president of IMP Group said, “Standard reps commission is 30% but that does not all go to us. 15% goes to the ad agency and 15% goes to us as the rep. Out of that, we have heavy expenses including currency transfers, etc etc. So I hope this put you right and that we will be fairly represented.”

Mr. Ben Hooren said that during his many years of conducting business with agencies in Israel or elsewhere, that the standard commission rate for an agency like IMP would be no more than 15%. “In all the years of doing business with a seemingly infinite amount of agencies, I can tell you that this dramatic uptick in commission rates is absolutely unheard of,” he said.

Mr. Ben-Hooren asked the IMP owners if their company had a clear comprehension of the how the New York advertising market operates, and if so, he inquired as to why they place their clients’ ads in small and very insignificant publications, rather than choosing the Jewish Voice.

The source close to IMP said, “They pretty much have a stranglehold on companies wishing to expand their advertising reach to the US. They are basically being strong armed into dealing with IMP or else they will never succeed in generating revenue through international advertising.”

Meanwhile, at the other end of the globe in the US and the UK, newspapers are relishing the concept of having their marketing teams and display ad departments work directly with Israel-based non-profits and businesses. Competitive rates are being negotiated so that this can ease the financial burden for the non-profits.

Mr. Ben-Hooren said, “If one really gives this situation some thought, they would be more than outraged. How dare IMP put this kind of highly unreasonable pressure on non-profits whose sole source of income comes from donors and benefactors. Every dollar is precious to these non-profits and for them to have to give huge amounts of donor money to an agency like IMP is despicable.

I honestly do not know how IMP can live with themselves knowing that the money they are taking as purported commission was originally intended to help the less fortunate who are being kept afloat by these non-profits.  I also take the non-profits and charities to task for squandering donor money on agency commissions when they can save money by dealing directly with publications. I happen to know that contributors to charities do not want the lion’s share of their donations to be spent of such frivolity, especially when that money could be earmarked for something way more important.”