'Media Auditing'- Progress or digress?

When Meenakshi Madhvani's Spatial Access' (SAS) entered into the media audit business last year, there was many a debate within the industry about its role in the country and the relevance of the service in the first place. The verdict was clearly divided. One year down the line, little has changed. Divided it still is.

In a nutshell, the auditing business aims at providing value for the client's media investments. Media auditors seek to promote accountability, transparency and fairness, as well as check that pitch promises are achievable and help reassure clients and their procurement managers that their investment are being well-managed.

Also, another interesting insight as to why an independent audit could gain importance is due to the fact that although marketers may be convinced that their advertising works, they still need to prove to the board that it is a wise investment, and independently scrutinised.

The US and the UK seem to be at ease with the whole media auditing space. Although there are unresolved issues like auditors trying to stifle creativity and squeeze agencies’ margins, media auditors have never been media buyers and hence do not understand the job, duplicating agency work and so on. With a standardised process in place, clients, agencies and auditors seem to have found their peace with each other.

The Indian media audit space however, still in its nascent years, is grappling with a lot of insecurity, non-clarity and bad blood.

One of the primary concerns that the industry seems to be pondering upon is the lack of clarity and ambiguity in the understanding of the media auditor’s role in the industry. Whether Spatial Access is strictly an audit company or also delves into the consulting arena is a question that most agencies are unclear on.

Throwing light on the same Madvani asserts, "We at SAS, help advertisers measure the returns they are getting on their media investments. We evaluate their plans and buying, review the implementation of the plan against the objectives that were agreed at the start of the campaign and study the process that they follow."

Most agencies still seem to be blank on the process it adopts and state that in a post-campaign scenario it's very simple to deduce the black spots of a buy or a plan.

The first serious hurdle is the transparency issue in the whole media scheme of things. Most countries abroad have a buying pool against which benchmarking is possible. And this is possible only due to the transparency of rates in the market. Starcom MD (West & South) Ravi Kiran points out, "To do a comparison of buying capability of different agencies today is quite an uphill task in India. Internationally, clients voluntarily agree to share their prices. It's the biggest role for a media auditor. Clients in India don't seem very open on the rates front.

Adding on the same Euro RSCG's chairman Ishan Raina offers, "In the UK and the US clients are transparent. I don't believe clients are transparent in India. It's an understanding. India is not yet a settled market and we have yet to mature to a greater degree of transparency between channels and clients and the media. More than media auditors, I see more media consultants coming in."

In today's scenario there are two companies in the media audit space. One being Spatial access and the other being Ernst & Young. While the former has delved into the media auditing space in toto, the latter is currently focussing only on process audits and have not got into the thick of things in terms of comprehensive media auditing. E&Y, when contacted abstained from commenting on the issue. Industry sources say the the auditing firm has expansion plans on the media audit front.

A significant issue in question is, that if one is looking at analysing rates, how will that be processed considering the fact that there are no set benchmarks today in the industry and a total lack of a buying pool? What will be the basis of auditing something like buys or for that matter even plans?

McCann Erickson president Santosh Desai elucidates, "Clearly, the media auditor service has been noticed and will remain pertinent to clients with a large scale of spends. Although considering the whole media space is such an unorganised sector audit also suffers from the same maladies as planning and buying are facing. The irony of the situation is that in developed markets, where benchmarking and buying pools are standardised, media auditing becomes a much simpler process although the need may not be so pronounced. On the other hand, India being a non benchmark market, media auditing becomes a very difficult process although the need may be far more pronounced."

Shashi Sinha offers, "Media auditors have a huge role in the planning as well buying area. They should be looking at systems and in the long run, one can create benchmarks in the media space which is nonexistent today. At present it's all a gut and hearsay game."

So, maybe media auditors will actually help set up the buying pool and the benchmark system which will in turn lead the media space to becoming a more transparent business.

Kiran, however, points out, "The buying pool needs to represent at least 15 to 20 per cent across categories. I think most agencies do their internal benchmarking. Audit is a great dimension but has to be representative of the universe. To audit media strategy is next to impossible. It has much to do with understanding of the brand, which cannot be done overnight. Add to that, clients will also be very wary about sharing this information as auditing is not core to the media business."

Madhvani offers, "We have a rate pool that we have built up of 38 advertisers across five markets and across all categories. This is a robust dynamic pool that gets updated on a regular basis. This gives us a means of comparing rates across a large cross section of advertisers. It gives our clients access to a factual comparison of how much they paid versus the market. We also look at the value that they have got from the deal and are not looking at plain costs.

"Even today, advertisers make casual comparisons among themselves as far as rates are concerned. We are making this process more factual and transparent. These comparisons provide the advertiser with benchmarks.

"These benchmarks have to be based on the clients media objectives. If the task was to reach 60 per cent of the target audience and the plan has reached 85 per cent, then obviously there is something wrong that needs detailed analysis. If the extra 25 per cent reached were not scheduled to be reached then the advertiser needs to review his decisions. Maybe he set the wrong objective! That's how benchmarks evolve over time."

While the above may all stand true, and may also seem to be a solution for creating benchmarks and standardised pools in this very unorganised sector, the emerging concern is that clients today seem to have immense faith in their media agencies and every decision is a mutual one.

Speaking on the same, Eureka Forbes senior vice-president marketing & knowledge management SK Palekar offers, "Like any other audit, media auditing, too, helps to get a second opinion. But audit is essentially about numbers and when this concept is extended to a media audit the measurable parameters cannot only be of a qualitative origin as the placement and planning of media strategy is highly subjective and run across umpteen criteria and all may not be translated into measurables."

Also, Palekar states that usually deals that one strikes are complicated package deals and one buys GRP's and a certain reach, so one really does not calculate the cost per programme. "A media auditor can probably gauge the efficacy on the overall parameters as the game becomes a more high stakes one."

Another point of note would be that with chief executives making their marketing people more and more accountable for costs, and media spends being the second major after raw materials, auditing will help justify as well as streamline cost to that effect.

All said and done, Eureka Forbes does not use media auditor services. Clients in India are quite closed about the rates they receive.

Substantiating on the same Set India's EVP Rohit Gupta says, "For anybody to do an audit, one has to be involved in the process from day one. Buys don't happen just on rates. People will sign on a Tendulkar at any price. Today,the audit cannot be viewed only on rates. It depends on the kind of positioning and the kind of subjective mileage one is looking at. Also, it's a myth that clients are not involved in the whole media process. In the last two years there is not a single deal I know off, where the client is not involved.

"Media auditors are not seen as a necessity. In a post buy scenario anybody can pin point faults. Also, I think there's not been too much clarity of the auditor's role."

Madhvani asserts, "Advertisers want transparency. They are paying the bills so I guess they have a right to ask what they want. Our clients are happy to share their rates with us since they can see the benefits of doing so. Someone has to make a start! Also, before we launched the company, we commissioned a qualitative researcher to do in-depth interviews with 25 of the top advertisers in the country. Each and every one of them felt the need for the service. In fact, it was their feedback that helped us craft and create the service. If there is a consumer need, the service will succeed. If there is no need then all the people you spoke to will have the last laugh. Either way at the end of 11 months and 15 clients, we know we are on the right track!"

Bajaj's vice president business development and marketing RL Ravichandran articulates, "Media auditing will help companies with huge ad spend scales. Organisations with diverse product groups with huge media spend budgets across all their categories would normally find it very useful to get a confirmation on their whole media strategy. It will help throw light to companies who are not so media savvy on comparing plan Vs delivery."

Talking about Bajaj's experience Ravichandran says, "We have done some initial media audits and although it brought to light some very interesting findings, the fund wastage that was calculated was very peripheral. Also, in our case, media spends are dependent on market conditions which are very volatile. But, a segment that should look at media auditing very seriously should be FMCG as they engage in a lot of top of the mind advertising."

And as Group M's CEO South Asia Ashutosh Srivastava points out, "Unless there are guidelines that are created, only the process can be audited. It’s a quality re-assurance. It becomes a very subjective game to audit media buying and planning strategy. Also, finally it depends on the person. There are good auditors and there are people who say they are auditors. That’s one of the reasons clients are apprehensive in engaging media auditing services. Players have to establish their true credentials."

Srivastava does accept though, that media auditing is a trend across the world, whose time is bound to come, as many companies have a policy to use media auditors. "The other place where it will add value is basically raising the profile of what smart planning can do," says Srivastava.

"Media Audits are a relatively new phenomenon in India although this is fairly common abroad. Audit is a very useful mechanism to provide a reassurance that media investments are efficient as well as effective," he avers.

The country's largest advertiser Hindustan Lever's general manager - Media Services B Venkataramanan has this to say on the matter: "An objective audit ensures that the advertiser receives maximum value for its investment, and provides a mechanism for driving continuous improvement of the media agency's planning and buying performance. Compliance audit, which combines both the financial audit as well as the audit of discount and rebates, is increasingly being used by advertisers. Rate benchmarking by constituting a pool of advertisers is still at a nascent stage in India. In Hindustan Lever Limited, we do have a system of audit of our media operations."

All said and done, media auditing, although in its nascent stage, will attain some degree of significance as this "sector" becomes more organised. The process in the long run (if sustained till then), will ensure elimination of the duff deal that ensures the pool represents a wide range of prices, but at the same time will also make it harder to get the real stoker of a buy.

Today media audits are performed post-activity. However, the age of electronic transactions are drawing nearer every day which will lead to increasing demands for transparency. Media buying is a specialist activity, separate from media planning. And clearly, the concern of the hour is "transparency". Transparency between the advertiser, agency and media owner/seller. Call it a sign of the times or a reflection of the increasingly complex and high stakes nature of business.

A clear message also seems to be emerging from advertisers. More than ever, a balance between managing budgets efficiently and a passionate knowledge of media strengths and weaknesses is crucial to an agency's success. Accountability has never been more at the heart of what the advertiser wants from a marketing strategy. Also, increasingly agency planners are required to demonstrate how marketing will deliver payback. But they still need planners who are passionate about media itself.

Clients today have more spending options than ever, so the need for independent advice is indisputable. The only interesting question at this point will be the road ahead in terms of acceptance, credibility and clarity from the media auditors' pad and transparency and a need felt for better value for media investments from the advertisers' side.

Madhavani's closing words, "The Indian media market is complex enough to need media auditors. Advertisers are mature enough to welcome such a service. Many agencies have accepted the fact that media auditing helps them in the long run. There will always be a small group with vested interests at stake who will be the loudest protesters. Even they have a role to play and unwittingly, through their protests, they endorse the fact that media auditors are required!"

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