Today’s new emphasis on media buying accountability is spawning a North American interest in a practice that’s been common in the U.K. and Europe for decades – media auditing, or third-party examination of media buys.
While reportedly three-quarters of all media dollars are audited in the U.K., an astonishingly low 2% of the spend is audited in the land of mega-budgets south of our border, according to U.S. trade Mediaweek.
In Canada, where budgets are notoriously tighter, some of our largest advertisers do conduct some form of auditing. But regular in-house or third-party auditors such as KPMG conduct much of this auditing. In the U.S. and elsewhere, third-party companies staffed by those with media experience have been set up to conduct the audits.
New York-based media consultant Erwin Ephron says a number of different processes are currently taking place under the heading of an audit. One of those is a financial audit at the back end to make sure the spots ran and to check invoices against what is paid. This type of audit is taking place, he says, because there is some concern in the U.S., particularly in cable, that as fragmentation creates more and more inventory, some advertisers may not be getting a fair GRP count.
As director of media services for one of Canada’s largest retailers, Anne Burton of the Toronto-based Hudson’s Bay Company is used to regular media audits. Her department handles buying for all three HBC retail chains: Home Outfitters, Zellers and The Bay.
Burton says that the company’s internal auditors do both spot-checks and in-depth audits, while a third-party company, such as KPMG, does random audits in support of HBC’s annual report.
‘Our own auditors do a small audit each year. They go in and follow the paper trail on two to three markets. They follow an invoice through to make sure of the invoice amount charged and the amount paid to the media supplier.
‘I would be concerned as a client with the amount of money spent – and maybe that’s why it happens in the U.S. with their big budgets. Would you really just hand over $50 million without ever checking? If I was sitting on the other side of the desk, I would tell my agency that once a year we’d like to do a random audit.’
What auditing did bring home for Burton is the fact that much of the relationship between buyers and broadcasters is built on a blind trust that the paper affidavit from the station – saying that spots ran when they were supposed to run – is accurate.
‘An auditor one year wanted to know how I knew the affidavit was correct. I was under the misunderstanding that stations actually go back and check. I said [to the auditor], we get fault reports, we get makegoods. But you know what? Stations don’t really check that thoroughly.’
One broadcaster is hoping to overcome that doubt.
CHUM Television subscribes to SpotWatch, a Nielsen Media Research service that monitors programs and ads aired via broadcast, cable and satellite, then reports on areas such as GRP weight, seasonality, pod position, creative theme and execution.
Dave Kirkwood, VP of marketing and sales for CHUM TV, says they brought in the service primarily as their own post-buy analysis and to monitor how much of an advertiser’s television spend was directed to CHUM stations.
Like most broadcasters, CHUM relies on real people in the control booth monitoring the commercials and paper affidavits to verify that spots ran as scheduled. But Kirkwood says SpotWatch is a good fallback when scheduling is being questioned, ‘It could certainly settle disputes and serve as a tie-breaker because it is a third-party audit.’
A large packaged-goods advertiser (who wished to remain anonymous) also mentioned SpotWatch. He said his company uses internal auditors to track media buys as well as SpotWatch, a type of service he believes is a good step towards third-party verification in Canada.
Soon there will be a second service broadcasters and buyers can use to verify affidavits: BBM Canada is launching a similar tracking service in January through a relationship with Competitive Media Reporting (CMR) one of the leading providers of commercial tracking information in the U.S.
The BBM/CMR service will be available in the Toronto and Vancouver markets, and users will be able to append the tracking information to BBM’s people-meter data.
Peter Tutlys, senior manager, group account director for advertising, media and promotion at RBC Financial Group, is another major marketer looking at bringing a third-party in to double check his media spend.
‘M2 Universal, on every single media buy, performs a post-audit of affidavits and provides us with a complete audit summary after each campaign. That’s standard practice all of the time,’ he says. ‘But we’re starting to look at third parties to help do an even a tighter job for us because we do take media efficiency very seriously. With M2 Universal’s assistance, we’ve already started some discussions.’
Tutlys believes that companies who have these types of audit processes in place are really benefiting the industry as a whole, keeping everything above board and transparent.
He says one of the many positive outcomes of RBC’s convergence program with the National Post and CanWest last year is that the media buy merited even closer scrutiny from the media owners and the agency to ensure that every ad ran when and where it was supposed to. Given the new and innovative media approach and highly publicized program, the appetite for it to succeed was especially strong.
‘It kept the media suppliers on their toes. While media owners are generally enthusiastic in helping clients create and execute media campaigns, it would be great if they paid that much attention to every single program.’
But Ephron says that such spot checks aren’t enough – media auditing has to be an ongoing process that’s built right into every buy.
‘Auditing is a terrible, very inept word because audit implies a point in time, a post-facto evaluation of what has happened and there is no remedy for that,’ he says. ‘There’s no reimbursement. What auditing should be, what good auditing is – and I do it for a number of clients – is really monitoring the process.
‘What you do is work with the agency to make sure the goals all make sense and then establish checkpoints so that you know if the process is out of control, that the buy does not have the proper dispersion amongst suppliers, the ratings levels are not high enough for individual spots, or the weight is not running on the weeks specified – things like that, which are actionable.’
