By Shubhra Kakkar, Media Marketing Compliance (MMC) India & South East Asia
The ever-expanding media supply chain is not only complex but also quite dynamic. While the intent of bringing these layers might have been to bring bulk efficiencies, with standardization of rates, transparent transactions that benefit everyone in the eco-system. But over time they have rather become barriers to information, prohibiting advertisers’ access to complete information on the media buying cycle....
The increasing distance between the advertiser and a media broadcaster in the standard media buying chain, makes complete transparency look a fading light at the end of the tunnel. Making marketers as well as finance stalwarts wondering if ‘the light’ aka. Media Transparency actually exists or it’s just an illusion.
There are multiple factors at play in the Marketing – Finance – Agency ecosystem, to ascertain the possibility and importance of financial transparency, especially in the current times of uncertainty.
Dynamic and Complex nature of Media transactions
Agency Advertiser relationship
And above all, the importance of having a right contract in place
Dynamic and Complex nature of Media transactions
The CMOs role has evolved to a great extent both in terms of opportunity as well as complexity. In the multi-media world, the CMO or a Chief Growth Officer has to manage multiple agency partners, from digital to traditional media, social strategy, influencer marketing and of course, creative production. While Marketing leads are responsible for campaign performance & measurement, is financial transparency also their KRA?
The ever-expanding media supply chain is not only complex but also quite dynamic. While the intent of bringing these layers might have been to bring bulk efficiencies, with standardization of rates, transparent transactions that benefit everyone in the ecosystem. But over time they have rather become barriers to information, prohibiting advertisers’ access to complete information on the media buying cycle.
The managements’ understanding and support will encourage CMOs to deploy the right audit partner to ensure financial compliance.
Agency advertiser relationship
It’s important to acknowledge that marketing agencies (media or creative) are one of the closest partners in the growth journey of a brand, making trust an important factor in the relationship.
Audit is often looked upon as an activity that questions this trust, on the contrary – audits are a tool to strengthen this trust to sustain a long-term relationship with the agency partners. Investments in audit will be far lower than the cost of changing agency partners due to non-compliance, or performance issues owing to lack of accountability.
Given the significant investments in marketing (one of the largest outgoing expenditures for a brand), it’s important to ensure these funds are entirely utilized for the brand’s benefit.
Financial Audits and Performance Audits
Media Finance audits are often confused or compared with media performance evaluation. Media performance measurement, or media cost benchmarking is different from ensuring financial transparency in media transactions, as they require completely different skill sets. While one ensures that the campaign delivers closest to the set objectives in the most efficient manner, the later ensures the media investments were done in the most transparent manner without any leakages.
Both have their significance, but the advertisers must have the right expectations from the scope of each audit.
In the fast-paced marketing scenario, everything takes a back seat during campaign roll outs. Agencies are also offer flexibility given timelines when it comes to signing contracts and drawing scope of works. While a contract is important to the agencies as it ensures their partnership, it is equally important to the advertiser as it secures their rights to get complete accountability and transparency from the agency partner.
An incomplete or outdated contract can be more harmful to the advertisers as it takes away their right to last mile data access on their own marketing investments. Similarly, contracts without appropriate audit or remuneration clauses, also give way for leakages in the media supply chain.
Advertisers should not only scrutinize the legal aspects but also the technicalities of media buying while drafting the contract. Given these complexities, it is advisable to conduct media finance audits – as it will ultimately check adherence to the contractual clauses.
Strong and regularly updated contracts not only leave no room for confusion and dispute, but also ensure compliance from a financial standpoint.
To sum up, media transparency can be a definite possibility if there is a combined effort from Marketing, Procurement, Finance and Internal Audit teams. All it takes is the right contract in place and the right audit partner to stress test that contract!
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