Media auditing is fundamental to maximising the performance of advertising campaigns. It helps create a level playing field between the advertiser and the media agency as both parties can spot any issues with media planning and media buying and see the overall performance of campaigns.
In an era of group media buying companies, transparency will continue to be one of the most important challenges facing advertisers in 2022. There has been a rise in media agencies limiting the amount of information that advertisers can see.
Media auditing has never been more important, yet harder for advertisers to choose the right media auditing service to meet their needs.
Did you know? By 2022, ad spend for programmatic display is set to reach nearly $95 billion.
This rise in digital media and auction-based programmatic methods involves a new set of dynamics.
Understanding the processes involved when looking to conduct a media audit in today’s fragmented media ecosystem can be confusing. This challenge is compounded when the term ‘media audit’ is often interchanged with other types of reviews. For example, you may audit pricing to ensure you are getting the best price, or check-in on compliance to ensure your agency is following the terms and conditions in their contract.
There is a way to simplify auditing and ensure all elements of a campaign are reviewed holistically - this is how you can get a clearer view of where campaigns need improving. This simple guide looks at the various auditing techniques, how they work and the benefits.
Why this is key: Advertisers cannot take for granted that their media agencies make all the right decisions and provide all of the information necessary to inform well-judged choices.
Moreover, media auditing provides answers to key questions, such as:
- Are your media prices competitive?
- What discounts and benefits have your media agency managed to negotiate using your budget?
- Have all these benefits been given back to you?
- Are you paying the correct amount for your media?
- Have the best available programmatic trading tools been selected and their methodologies properly vetted?
- How have the media costs been derived and are they in line with agreed contractual terms?
The answers to these questions give advertisers assurance that they are obtaining fair value from their advertising spend and if not, provide the necessary information in order to negotiate better terms.
Why should you audit your media agency?
As we’ve already pointed to: The advertising industry is in a crisis of trust. Advertisers are auditing their media agencies to improve transparency.
The first thing is media price disparity. Depending on your media agency contract terms and conditions: the media costs for exactly the same inventory as a competitor could be a pricing difference of over 70%, depending on your market.
And in some markets, it’s even greater than that.
But without media auditing you wouldn’t know that. It’s also important to know how intermediaries are being used—and at what cost—so that the maximum amount of spend goes toward working media. You wouldn’t buy a house without a structural survey. Media should be no different - especially given the huge amounts involved.
Media auditors can provide a competitive advantage to advertisers by allowing them to track and analyse the performance of their advertising across multiple media channels.
Media audits give advertisers complete transparency about the decisions made and enable advertisers to increase return on investment.
“From my 20 years experience as a media auditor, I learned the hard truth. In media buying there are winners and losers. That’s why Abintus advocates a holistic audit process. This is much more than a standard audit – it’s part of a full consultative process, based around a demanding set of checks and balances, which leaves no stone unturned.”
Philippe Dominois - Chief Executive Officer & Co-founder
Did you know: 91% of the top global advertisers use media auditors on an ongoing basis? The winners use media auditors day-in-day-out to ensure that they’re getting the best prices, the best media inventory, and the best people from their media agency.
What goes into a media audit: The key techniques to be aware of
Auditing media performance and the media agency can be managed through several different approaches: benchmarking, media value tracking, agency contract compliance audit, and internal audits. These help to assess the cost, performance, process and strategy.
Here’s a brief description of each media auditing type:
Media audit technique #1: Pool benchmarking
To assess media cost performance, historical and year-on-year benchmarks are most often used:
- Historical benchmarks - Using a pool of comparable data
- Year-on-year benchmarks - Comparing your business’s performance in previous years, taking media inflation into account
In a nutshell, the whole idea of cost benchmarking is to compare your media prices against a pool of other advertisers, on a like-for-like basis. It is used for advertisers who want to understand how competitive their media prices are against the market average.
Lack of transparency is a major issue in advertising. Pricing alone is largely impacted by this: The same media inventory can be bought at a very competitive price by advertisers that are well versed in ensuring their media agency contracts and processes follow best practices - whilst smaller, less savvy advertisers suffer with the worse inventory and at a higher cost. We’ve seen prices vary by up to 70% in some markets - imagine finding out you are paying this much more than your competitors.
And this is why benchmarking is so crucial. If you haven’t used one before, it's a great place to start to understand the level of pricing competitiveness. A media pricing audit then helps you to compare pricing in relation to quality.
Media audit technique #2: Verification media audit
A verification media audit ensures you get what you paid for. It validates the amount of budget your agency paid versus the amount you were charged and allows you to uncover the discrepancies and calculate reimbursements or credits due back - things that aren’t spotted during your usual internal audits.
A verification media audit is also used for advertisers who have cost and quality commitments from their media agencies. And therefore they use that service in order to assess whether the agency has been delivering on those commitments. Including agency commitments in your media agency contracts enables you to regularly check-in to see if your pricing, technical costs and service expectations are being met. However, it's important to note that the verification audit isn’t able to ensure the originally agreed strategic direction is being followed.
Regularly auditing helps with reconciling media spend, production, technical and agency fees - and ensuring all invoices and credit notes contain all the information you need. A verification audit is great for this - it can provide you with a full reconciliation of the past twelve months so that you can trust that the correct amount was paid for media and that you can highlight any credits due back to you.
Media audit technique #3: Agency contract compliance audit
An agency contract compliance audit (or financial media audit) reviews the terms or conditions of your contract that you have with your media agency and verifies whether your agency is adhering to them. It can also highlight if your internal operations comply with the terms in the contract too.
The compliance audit runs in-depth analysis on; the scope of work, resources provided, remuneration, billable expenses, invoicing and payments and reporting requirements. You can go broader and run more extensive checks on every element of a contract. But, it's best to focus on an area of concern to really understand an agency’s performance and whether they meet the contractual obligations.
Due to the advertising landscape becoming more complex (with different organisations involved in the media planning and buying supply chain), contract compliance auditing is now much more frequently used by advertisers to ensure pricing and quality expectations are met.
Media Audit Technique #4: Transparency media auditing
A media transparency audit enables you to assess the level of transparency between you and your media agency.
With this audit, an independent third-party is brought in to review the financial statements provided by the media agency so that you can get a non-biased view of whether statements are relevant, accurate and complete - covering everything from discounts, Agency Volume Benefits (AVBs) and cash rebates (rebates alone can be significant - we’ve seen as much as 28% of net media spend being returned). It also allows you to benchmark your AVBs against competitors at a media channel level - so that you can see the share of your net investment.
This detail is essential for transparency and balance in the relationship and ensuring you too can see exactly how media budget is being spent and where.
Media Audit Technique #5: Remuneration auditing
A media agency remuneration audit enables you to assess remuneration against the original contract agreed with the media agency - taking into account fees based on time commitments, verifying correct commission percentage and checks billing accuracy. The audit will review performance results and then apply these to the contracted remuneration package to ensure the right payment is made to you.
It also highlights the strengths and weaknesses of your current remuneration model - and benchmark the agency fees against a remuneration database.
These are the main remuneration methods:
- Fees based on projected personnel time required for the scope of work
- A commission percentage on the client’s media expenditures (gross or net)
- A combination of fees and commissions
- Performance Related Fees (PRF)
The insight from the model is there to highlight improvements and enable you to improve campaign performance as an advertiser/media agency partnership. Selecting the right agency remuneration model is therefore fundamental to getting the best out of your media agency.
Media Audit Technique #6: Process auditing
The process audit enables you to ensure all your media planning and buying processes are as effective as possible – which is essential to optimise advertising performance and Return on Investment. It reviews the entire media process – not just the financial side of media buying - to highlight areas for improvement to maximise productivity.
This audit does this by covering a range of areas. It reviews cost controls and financial systems, communication channels, advertiser and agency responsibilities, timetables, scope of work and ensures better practices are in place and being followed.
Often, a poor media process is associated with poor media performance. Specific expertise is required (both on the advertiser and media agencies side) to manage the media planning and buying process to effectively manage what, when, where and how often to advertise. With a media process audit, you can ensure performance is optimised from briefing through to performance measurement. With it, you can highlight areas for improvement and benchmark against industry best practices.
Media Audit Technique #7: Contract auditing
A media agency contract review is a holistic view of your media agency contract. It enables you to see if key contractual obligations and best practices are being met.
The contract is fundamental to a successful relationship between you and your media agency. One flaw in the contract can cause a major expense. With a best practice contract in place from the start ensures you receive better levels of service, commercial and behaviour.
It’s therefore an essential audit. It creates greater transparency over media investments and how your agency is managing campaigns so that you can see strengths and weaknesses of your media agency contract. And, also benchmarks your results against other media agency contracts to help adhere to best practices.
Media Audit Technique #8: Agency deliverables
The quality of media strategies, media flowcharts, media plans and media post buy reports influence your media performance. And it’s hard to optimise performance without having best practice strategies and reporting in place.
With a media agency deliverables audit, a thorough assessment of all media documents is done for a 12 month period and each piece is given an average score - this is benchmarked against industry standards so that you can see if your media agency deliverables are at the required standard.
Ready to start your own media audit? Find out more here.
How to choose the right media audit
If you haven’t run a media audit before, it can be difficult to pick the right services. Moreover, having an audit report demonstrating that your brand is paying media at a premium will not help if you are unhappy with the service of the media agency. Nor will it help with how to improve media pricing moving forward. It just gives you a reference point, that's all.
That's why the holistic media audit is best for advertisers who have never done a media audit before. It will cover many more aspects of media management, and highlight the areas which require significant change to improve performance.
Is it better to do a deep dive in one aspect (i.e. media pricing) or a light assessment of eight different aspects, giving you much more insights into where the low hanging fruits or issues are.
In a nutshell: What is a holistic media audit?
A holistic media audit is essentially a series of fact-based assessments of the performance of your media purchases, media agency, and internal processes by a neutral, third-party expert.
A holistic approach covers a series of techniques, covered above, to create one comprehensive media audit report. This 360-degree diagnostic assessment of your media performance enables you to see a clear snapshot in time of how your media investments are performing. And how both your media agency and your internal processes align. This helps you to identify areas to improve and take action so that you can create the best campaigns and best results from your media investments.
Media auditing is beneficial for both advertisers and media agencies. It creates a balance in the relationship and more of a partnership, helping to identify where improvements can be made on both sides. This benefits the media agency as they are provided the support they need, and the advertiser as they have greater transparency over media performance.
A holistic approach to auditing is essential to track the entire media process - from benchmarking to auditing deliverables. This helps to ensure best practices are followed throughout and flags areas where the media agency or internal teams don’t meet contractual obligations.
A holistic media audit can enable you to:
- Save significant money; By identifying up to 70% cost differences for our clients you can reduce your overall spend.
- Improve agency-advertiser relationships; Through applying best practices to your internal operations you can get the best out of media agency relationships.
- Improve overall media quality; By asking your media partners to participate in a third-party audit, you gain assurance that your ads are being placed on trusted channels that meet industry standards, deliver quality data and provide maximum ROI.
- Track and measure performance achievements; Versus goals (both pricing and quality) - providing key findings and areas to improve.
- Checks compliance to the media plan/buying guidelines; Against what was outlined in the contract.
- Supports ease of remuneration; Ensuring the correct compensation is given.
For further insight book a free consultation to understand which media audit process will be the best for your specific needs.