MasterClass Notes: Why media transparency is a tricky topic
by Johanna McDowell (@jomcdowell) I first started talking about media auditing some eight years ago, only because I didn’t know what it was and had heard the term at my first AdForum Worldwide Summit in New York. Media auditing has been growing in importance ever since. There have been some local examples in South Africa and I’m aware that some of the large multinationals have conducted media audits for years — mainly using overseas expertise.
Mentioning media audits to clients in SA has elicited some interesting responses. Most clients talk about media being a “black hole” and either they have no wish to get into the detail of actual expenditure vs planned or they have no wish to upset their media agencies. There is even greater confusion now that digital media and programmatic buying have become part of our media landscape.
I believe that the responses from marketers are rooted in lack of adequate knowledge and understanding. The time pressures that all marketers are under leads them to keep questions around expenditure to a minimum or on a need-to-know basis, too. When asked about media auditing, there’s also a fear that it might not be worth spending marketing funds on one as it might be too expensive an exercise with little yield.
Time spent on understanding the media, costs and implications is often sacrificed in favour concentrating on the ad content, as opposed to the distribution channels.
Media transparency is surely a corporate governance issue and something that needs to be talked about — with confidence. Media agencies have their own codes of governance and are generally well-respected locally and internationally.
So why, then, is there a need to audit? And what is a meaningful media audit?
It’s not about forensics.
Naturally, part of the process is a typical audit-trail check of invoices from the media owner, invoices from the media agency to clients, client payments to media agencies, and media agency payments to owners. There may well be instances of media discounts not being disclosed or returned to marketers. But this isn’t the only purpose behind a media audit. It’s not designed to ‘catch people out’.
Equally important are the media planning tools that are being used, the rates that are being negotiated and even the choice of media. Media optimisation is a critical part of media auditing and the piece that marketers will feel more comfortable to focus on while, perhaps, procurement looks into the ‘forensics’.
With the advent of trading desks at the media agencies some years ago, suddenly there were questions around media inventory — TV, print and radio and outdoor — that media agencies held and might have recommended to marketers because it was economical, rather than the optimal choice for the marketer’s brand. This has now been extended to digital media, and this becomes even more complex with some of the digital media owners also providing a type of trading desk directly to clients — instead of via the media agencies.
So the landscape is complex.
Is it important enough to warrant the expense of a media audit?
Yes, I believe so, in order to optimise expenditure, track ROI and ensure good media governance and business ethics. I also think that both local and international brands will need to prove that they have conducted business properly in the years to come.
The cost of a media audit relates to the work involved, not necessarily the amount of budget spent by the advertiser. But, clearly, the larger and more-complex budgets will require more auditing. From a governance perspective, it’s not about one media agency auditing another’s media plan and expenditure; this is a recipe for games-playing and manipulation of expenditure to suit the competing agency. I’m aware that this is something that does happen (not only in the SA market but in other markets, too.)
Media audits are not the same as financial audits, although there are some similarities in reference to invoice- and receipt-checking. But there the similarities end. Media auditing is about maximising media options and optimising media expenditure for marketers. It’s not a witch hunt. Media transparency is an increasing demand in the corporate market place where governance is becoming more rigorous — and so much the better for it.
There was a time, until recently, when marketers might have asked one media agency to evaluate another’s plan and costs. This naturally led to price comparisons, which may or may not have been fair on both parties. These days, the role of a media-auditing company is much clearer and the need for independence much greater. Local players will start coming into the SA market and will be able to offer a competitively priced, independent service with a strong focus on governance and media optimisation.
I believe that the independence of this kind of work is an essential component for a marketer to achieve maximum ROI in an increasingly fragmented media landscape.
Johanna McDowell (@jomcdowell) is managing director of the Independent Agency Search and Selection Company (IAS), which is partnered with the AAR Group in the UK. Johanna is one of the few experts driving this mediation and advisory service in SA and globally. Currently she is running the IAS Marketers Masterclass, a programme consisting of masterclasses held in Cape Town and in Johannesburg. Twice a year she attends AdForum Worldwide Summits.