By Stephen Broderick, Managing Partner, Media Marketing Compliance (MMC)
When the pandemic struck last year, the marketing and advertising sector had to adapt quickly and sharply. From global businesses through to start ups, we all pivoted on budgets, channel usage and were forced to revaluate our pipeline of work. Many advertising campaigns were entirely repurposed or simply scrapped altogether.
These changes required an overhaul of the contracts underpinning everything.
For those in the compliance auditing sector, it affected us and our clients two-fold.
Firstly, the normal practice of going on site at agencies to carry out audits alongside them and in person had to stop. But this was already something we had been conscious of streamlining before COVID struck and the offices closed.
Since 2019 and early 2020, our senior team had been working closely with agency groups to move and design new processes and move towards remote audits. This meant that when launching MMC, we were already knowledgeable and comfortable with the new way of doing things, as were the major agency groups.
In general, the industry transition to remote audits has been quick, seamless, and well received. Sure, it’s had its challenges, but we’d say that it’s sped up the process by around 40% compared to work before the pandemic and it has certainly reduced the agency resource required to prepare and complete the audits. Good news for both advertisers and agencies.
The second and more profound effect on the compliance auditing sector has been to unpick the various solutions agencies provided to clients when the pressure was on.
As those budgets were cut and consumer attention shifted, has it been possible to be fully transparent with changes that were made? And are both sides being careful to ensure that their working relationships will not be damaged by anything accidentally missed or hidden away?
We believe there are several areas both sides should be evaluating more than one year on from the start of the pandemic.
Let’s begin with budgets. In some sectors there were dramatic cuts, which led to some media vendors offering huge discounts to agency groups as incentives. The rationale been that strict lockdown rules dramatically reduced how many people saw the ads. But we are seeing evidence that these discounts and savings have not been passed back to clients as the contract states they should be.
Likewise, as the worth of inventory changed at a rapid pace, was the increased sale of agency owned inventory correctly approved by clients? And has it continued to be approved by them, given we are still experiencing peaks and troughs across the world when it comes to footfall levels, regional lockdowns, and sectors such as retail, hospitality and travel opening at different times?
While it has been over a year since the first lockdown many contracts will be longer term deals. This means that agencies may still be scrambling to hit annual spend commitments with certain media vendors while at the same time trying to deliver price commitments guaranteed for clients.
As they do so, have they amended client’s media plans to achieve this? And how will these plans change over the next 12 to 18 months?
Then there’s the use of value pots in a non-pro-rata manner to achieve price commitments. Have you been getting your free media? Or, indeed, has another client been getting your free media?
Finally, there are several housekeeping issues that we would urge businesses to look at. These are conditions that are not necessarily linked to campaign spend but still impact the final amount of money that gets to the end of the funnel.
As teams have been furloughed and agencies try to service with fewer staff, fee servicing issues will linger. These need to be investigated to create clarity between the advertiser and its agencies as to who has been working for them, for how much and for how long.
Gaps here may lead to your business being over charged, or worse, paying for staff that are not even present on your project.
It’s also important for auditors to examine whether back-office functions such as production reconciliations and finance have been maintained during lockdown. A lot could have been overlooked while agencies understandably focused on saving the profitable parts of their business.
As we, hopefully, begin to emerge from the more restrictive elements of lockdown and social distancing, our sector will look more like it did pre-pandemic.
But the issue of media transparency, which was of course an ongoing point of contention before, remains a crucial part of building faith in a sector negatively impacted by COVID.
Now is the time to begin afresh and create more transparent habits. Doing so will help foster the strong advertiser and agency relations needed as we rebound and move into a more positive future.