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ERWIN EPHRON EPHRON, PAPAZIAN, EPHRON, INC.
THE AGE OF THE ANXIETY?
Media audits focus on diligence, more than deceit.
But either way, more advertisers want the reassurance.
____________________
First Enron, then World Com. Ogilvy then Omnicom. Irregularities
breed an oversight mentality and in our little corner, Media Auditing, long
held at bay by the agency giants, is about to break down their doors.
Big media is uniquely vulnerable. Most dollars are spent in TV where the
buying process is Afghanistan.
Shoot first and sort the bodies
later. How else could there be an
eight billion dollar upfront, over-
the-phone, in two weeks?
Add to that the intangible pur-
chase, the volatilepricing, the cer-
tain suspicion that others bought
it cheaper and you have an edgy
situation. This is not the careful way big business likes to do business and
that makes big business nervous. Call in the auditors.
Like letting rabbits carry lettuce
A little known fact. Media auditing was invented by big agencies to beat
down the buying services.
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In the 1960s these early media independents
were telling clients, Your agencies pay full
price. Wecan buy TV for a lot less and well split
thedifferencewith you.
Agencies knew that would be like letting rab-
bits carry lettuce, and for a brief period went
into the auditing business. To keep the rabbits
honest, and from multiplying.
Today its not so much a question of honesty.
Few clients think the media AOR is pocketing
loose change. Their finance people spot check the invoices and audit the
books. But many advertisers feel formal oversight is good in media,
where critical functions and large sums are involved. Its not rabbits and
lettuce. Its diligence, best practice and being sure.
Auditing is a lousy word
The problem is Auditing doesnt get it quite right. Media planning and
buying is an ongoing process, not an event. Its more like quality control
in Detroit. You want to be sure the car door fits before 250,000 of them are
stamped out. Similarly, you need to know if plan goals are being met as
the money is being spent, not after youve spent it. But the auditing
measures cant be too simple.
Elephant lights
A story. The Planning Ministry in the old USSR had production goals for
every factory. One in particular, a brass foundry, had an annual target of
350,000 pounds of finished brass lamps. Each year they beat the target
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ERWIN EPHRON EPHRON, PAPAZIAN, EPHRON, INC.
easily by shipping lamps with an average weight of
170 pounds. In Russia these were called elephant
lights.
The moral is a single number system is easily
fooled. Performance measures that concentrate on
CPM are no exception. Low CPMs can be in trade
for things like low ratings, a one- or two-supplier
deal, edgy program content, uncertain scheduling.
Each carries a cost. Oversight means looking at
other things like rating level, day part, program and supplier dispersion,
weekly reach, weeks on air, and weeks at or above plan weight as well as
CPMs.
Rent-a-Spy
Another problem. The competitive focus advertisers force on media au-
diting is crazy. In the US, no third party can tell an advertiser whether it
is paying more or less than the competition. For that you hire an indus-
trial spy. Besides, Am I paying less? isnt the best question. Better to ask,
Areweplanning and buying as well as we can? and Is what webuy being
delivered to spec and when weneed it?"
Now that is the agencys assignment, but it remains the clients risk,
which suggests the client cant be passive.
Besides, good clients make bad auditors. Its a paradox, but you need au-
diting more when the client-agency relationship is good than when it
isnt. Those clients arent comfortable closely questioning agency claims
of superior planning and buying. AORs are only human. Nobodys per-
fect, but we all pretend.
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ERWIN EPHRON EPHRON, PAPAZIAN, EPHRON, INC.
Globalization and Consolidation
Some media agencies think auditing just
makes work. And some client managers feel
oversight is what theyre being paid to do.
Fair enough. But others agencies see it as a
way to keep an account long-term and some
managers welcome the help.
Despite conflicting views, more media auditing here in the US is inevita-
ble. Global advertisers want global standards and auditing is standard in
many other countries.
But the biggest reason auditing will happen here is because of the Media
Agency, not in spite of it. Auditing is the flip side of the consolidated me-
dia assignment.
A simple way to reduce risk
In the past a large advertiser could
count on its several brand media agen-
cies to keep it informed and keep each
other alert. The dynamic was competi-
tion.
Our current system is a loose tooth. The advertiser is captive to a single
media AOR. No matter how trustworthy the AOR, best practice requires
a second view. Smart agencies understand this and will make auditing
their point-of-difference. The We invite auditing slide will be popping-
up in new business presentations across the country. And some AORs
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ERWIN EPHRON EPHRON, PAPAZIAN, EPHRON, INC.
will even offer to share the costs with major clients. Its just good busi-
ness.
Advertising is too often like buying a melon where you have to spend the
money to find out if its any good. It remains one of the few high-risk
purchases a careful corporation will make.
Intelligent auditing is a simple way to reduce the risk.
- August 1, 2002 -
Originally published in Advertising Age