By Jane Dormer, Media Marketing Compliance (MMC) Global Client Services
The way the industry views marketing procurement needs to evolve.
Marketing procurement has always been a valuable asset to any brand and can be for every agency too. Never more so when there is a “crisis” or belt-tightening as we have had in recent times with the potential triple whammy threat of Brexit, Covid-19 and supply chain restrictions.
In these times, marketing procurement teams need to support and promote the valued marketing supplier partnerships that are in place, ensure transparency on all sides in these relationships and be able to demonstrate the return on investment they bring.
An obvious and key tool in all this is agency audits. While we have seen them evolve and grow over 20 years, they haven’t always been used to their full potential—for either party.
Time to reset
All of us involved in media must—urgently—review our perception and expectation of audits. This will not only ensure that audits really are useful; it will also assist in the repair of some frayed advertiser/agency relations.
Good auditing proves the value of an agency to an in-house team. It also gives comfort to board directors on the client side that their own teams are delivering. And when client CFOs require either a reduction in costs or better value for money, an audit says their marketing team knows what’s happening, what’s working, what’s not and how they can either defend or improve an agency relationship.
"As a client, if you lowball an agency—how can they afford to give you access to their best talent?" - Jane Dormer
Unhelpfully, for some advertisers and agencies, audits have sometimes been about finding fault. Confrontational and time-consuming pieces of work are perhaps based too much on justifying a position rather than fairly and accurately judging a marketing investment.
Rather than either side having an adversarial approach, both advertiser and agency should be able to enter a compliance audit knowing it will benefit both parties. Of course, there will always be a focus on the money, but other outputs should also identify what needs to be done to make things work smoothly and transparently for everyone going forward.
A need for flexibility
Compliance audits have been used as a tool by some on the client side, of course, to support what has become something of a race to the bottom in parts of the media landscape. As a client, if you lowball an agency—how can it afford to give you access to its best talent? Agencies must make a fair day’s pay—and auditing properly can accurately and fairly support and demonstrate this.
CFOs know the cost of operating a business and with the right insight from an audit and a healthy working relationship, they can offer flexibility to their agencies and support them in focusing on the right things.
But flexibility and building on the right kind of working relationship is a two-way street. Can agencies assure their clients they are not promoting media plans that benefit themselves first rather than what’s best for the client? Inventory media can be the right thing for a client but not if they are paying for it twice. And, in any case, there is no valid argument as to why it must be delivered on a non-disclosed and non-auditable basis. Would we accept this practice in any other aspect of business?
If the argument is that agencies are taking a risk by buying the media upfront and that risk should afford them a margin, then so be it. Agree on a fair margin but then allow the media trade to be open and transparent.
Where is the trust?
Pre- (and post-) audit, transparency and trust are key.
Taking positions such as stating an audit is not specified in a contract or raising market maturity as a reason for avoiding audits should be viewed as exactly what they seem like—avoidance tactics. Neither side needs to bluff, blag, squirrel away data or squeeze the other. A great working relationship underwritten by planned for and practical audit trails helps everyone succeed and prosper.
An audit must not be about finding ways to batter down an agency’s margin. Nor a way of unfairly blaming a client. Instead, it is best deployed to ensure both build a better future. An agency has a healthy margin and the client an honest and fair ROI.
Audits, not aggro, must be the mantra for 2022.
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