In today’s fast-paced and competitive environment, advertising spend is one of the most significant budget items for the world’s largest companies. But media spend can soon expand. Under pressure to deliver more sales, more customers, and more profits, six-figure media budgets stretch to seven almost unnoticed. Seven figures stretch to eight. And the world’s largest brands spend north of $1 billion per year on media advertising.
But how do you know your budget is being spent wisely? Trust in the advertising industry is arguably lower than ever. Many feel uncomfortable relying on the reports of their media agency, concerned that data is presented in a less than transparent fashion.
However, being able to accurately interrogate a media budget requires significant internal expertise. As just one example, do you have the in-house knowledge to verify whether your business is being charged the correct amounts by your media agency? Or are you forced to operate on trust and blind faith?
If you are worried that you might be operating on feelings rather than facts, a financial media audit can help to give you the confidence and certainty you need.
This audit looks at the granular detail of your media spend and helps you to achieve full media accountability. It can be completed as a standalone piece of work, or as part of a wider holistic media audit that aims to give you the insight and expertise to allow you to enjoy:
- Greater confidence in your media agency partner
- Improved results from media campaigns
- Better transparency of your entire media spend
- Cost-effective commercial agreements
- Productive agency management operations
In short, it enables you to ensure your business is getting the best value out of its marketing investments, that media performance is optimised, and that you have secured the best possible deals with your media suppliers.
What is financial media auditing?
Financial media audits form a crucial part of the holistic media audit. They are critical for ensuring media transparency, which in turn ensures you are maximising your return on advertising spend (ROAS) and highlights any wasteful or unnecessary spending.
They also look specifically at the financial agreements, transactions, and reporting that have taken place within the scope of your media agency relationship.
They examine and assess:
- Media agency contracts
- Advertiser documents
- Media agency invoices
- Reconciliation reports
Financial media audits also ensure your business is not being overcharged by your media agency. Invoices, approvals (purchase authorisations) and receipts of invoice payments are all examined. An independent third party undertakes this work to determine whether financial statements provided by your media agency are relevant, accurate and complete.
This process helps to check that you are being charged the correct amount, that any discounts or benefits your media agency has negotiated using your budget (AVBs for instance) have been passed on to you, and that your media costs are in line with your agreed contractual terms.
That’s why 91% of the world’s top advertisers use media auditors on an ongoing basis.
Does a financial media audit check media invoices?
It should, yes. It’s best practice to have a full review of invoices over the last 12 months. This is a much more thorough and effective approach than using a sample of media invoices selected at random (which some media audits do).
With the right expert support, you can assess a large range of media invoice types, including:
- Media inventory (airtime)
- Agency remuneration
- AVBs (as credit notes)
- Digital media technical costs
- OOH production costs
- Miscellaneous expenses (research, etc)
This level of scrutiny enables us to make accurate and worthwhile assessments of the share of working media (media inventory) versus non-working media (all other spending).
At Abintus, we also examine the quality of the invoices (i.e. is enough relevant information included?) and any reconciliation report provided by your media agency. Cross-checking this with the findings of our own audit soon highlights any inaccuracies.
“Proactive and helpful team, with strong experience in media. Abintus helped us a lot to identify best practices and areas of improvement in our media management process.”
Barbara Concordia, Business Intelligence Manager, Pernod Ricard
Why is a financial media audit key to ensure full media accountability?
Without a thorough financial media audit, it is impossible to ever achieve full media accountability.
A well-executed financial media audit covers every aspect of the financial relationship between your business and your media agency. That level of scrutiny is the single most effective factor that can help to increase the performance of your media campaigns. There is simply no hiding place. Wasteful spends and poor ROIs are identified and eradicated at speed.
By maximising the benefits of every penny you spend on media, you are also able to enjoy greater market competitiveness.
From that basis of complete transparency, you and your media agency are able to move forward on a platform of trust. You share the foundations on which you are able to build a long-term and fruitful relationship.
Is a financial media audit right for my business?
If your organisation employs the services of a media agency and has any kind of significant media spend, then a financial media audit is both a prudent and potentially very profitable exercise.
It helps to instantly eradicate any nagging concerns you have about the effectiveness of your spend or the accuracy of the data you receive from your agency. It supplies you with the intelligence and insight you need to maximise the effectiveness of your media spend – without having to make expensive internal hires.
What is a full, holistic media audit?
A full, holistic media audit makes a quantitative assessment of both your media agency and your contract with your media agency. It involves a range of processes designed to assess the cost, performance, process, and strategy of your media agency. These include pool benchmarking, contract compliance audits, media transparency audits, agency deliverables audits, and many more.
>> Read now: What is holistic media auditing? (A complete guide)
An Abintus media audit, which is typically delivered in just 12 weeks, also includes a media agency deliverables scoring model, full reconciliation of the past 12 months’ media activities, and insights from our proprietary media agency contract and remuneration databases. Our subsequent report gives you the knowledge to:
- Identify savings by benchmarking media pricing, agency remuneration, cash agency volume bonuses (AVBs), and digital media technical costs. This can have a significant bottom-line impact.
- Assess compliance by comparing your contractual terms with your media agency against the subsequent deliverables received and actions taken. This can help you to identify any unfilled obligations.
- Identify deficiencies from either your media agency or your internal team in relation to the media planning and buying process. This can help you to introduce best practices where they are missing.
- Learn best practices so that you are better able to challenge media agencies during the delivery of future contracts. This helps you to maximise the value of your relationships.
- Roadmap for improvements by providing clear recommendations (with milestones and timelines). This helps to ensure your media performance continues to evolve positively.
Since 2018, our strategic and systematic approach to media transformation has helped some of the world’s most ambitious brands to improve their media performance and ROI.
If you are looking for a financial media audit partner or a full, holistic media audit, you can find out more about our services by downloading our free eBook.