Who Au­dits the Au­di­tor?

ArabAd - - CONTENTS - By Iain Ak­er­man

As the thirst for me­dia au­dits in­creases, how can the in­dus­try en­sure that global stan­dards of best prac­tice are up­held and un­eth­i­cal be­hav­iour is weeded out?

A ca­sual glance at me­dia au­dits re­veals lit­tle to sug­gest con­cerns are afoot. Yet me­dia au­dit­ing has risen up the client agenda and is rustling feath­ers.

As ad­ver­tis­ers in­creas­ingly re­quest re­as­sur­ances that agen­cies are mak­ing the most ef­fec­tive me­dia in­vest­ments on their be­half, so the preva­lence of au­dits and au­di­tors has risen in the re­gion. With that rise has come con­cerns over the ro­bust­ness of bench­marks, the ar­bi­trary low­er­ing of me­dia in­ven­tory prices, au­di­tor re­mu­ner­a­tion, and con­flicts of in­ter­est.

It’s a sen­si­tive topic and one that will only in­crease in im­por­tance, as pro­cure­ment de­part­ments de­mand greater checks on how agen­cies are spend­ing their money.

The key com­po­nents of such au­dits are rig­or­ous scru­tiny of what was spent, what was de­liv­ered, the con­text of the me­dia mar­ket, the con­text of com­pet­i­tive ad­ver­tis­ers, ad­her­ence to plans and con­trac­tual obli­ga­tions, and the out­comes (me­dia met­rics) achieved. At the heart of all this are me­dia bench­marks, which act as ref­er­ence points via a pool of com­pa­ra­ble data. The size and scope of such pools is of para­mount im­por­tance.

“Au­dit­ing with­out pools is like navigating with a com­pass when you could be us­ing a sat­nav,” says Martin Sam­brook, who is in charge of in­ter­na­tional busi­ness de­vel­op­ment and client ser­vice at Ebiq­uity, a lead­ing in­de­pen­dent mar­ket­ing and me­dia con­sul­tancy based in Lon­don. “You might be head­ing in the gen­eral di­rec­tion but you don’t know when you’ve found the des­ti­na­tion you should be at.”

“An au­di­tor’s busi­ness is data-driven,” adds Philipp Vo­geler, found­ing part­ner at

AU­DITS’ KEY COM­PO­NENTS

AJCME, which pro­vides me­dia au­dits and ad­vi­sory ser­vices to the me­dia in­dus­try across the Mid­dle East and North Africa. “Ad­e­quate anal­y­sis can only take place if the plat­form on which the anal­y­sis is done is ro­bust. In the case of com­pet­i­tive bench­mark­ing, pools are crit­i­cal. The ab­sence of a ro­bust pool shall gen­er­ate a weak bench­mark. This will not do jus­tice to the task at hand. If we take away the data from that, we shall act as con­sul­tants and not as au­di­tors. There is an in­her­ent dif­fer­ence be­tween the two.”

It is this in­her­ent dif­fer­ence that causes some con­cern. Au­dit­ing and con­sult­ing do not sit well to­gether and this both­ers many – both agen­cies and au­di­tors alike. It does so for two rea­sons.

Firstly, be­cause it high­lights po­ten­tial con­flicts of in­ter­est. In the US, the Sar­banes-oxley Act of 2002, which was en­acted in re­ac­tion to ma­jor cor­po­rate and ac­count­ing scan­dals, stip­u­lated that an au­di­tor can­not serve as a con­sul­tant for the same busi­ness. The es­sen­tial fear is that au­di­tors may not crit­i­cise com­pa­nies they also con­sult for, and vice versa. In short, they could be com­pro­mised.

“Whereas the Sar­banes-oxley Act only refers to fi­nan­cial au­di­tors (not all the work which me­dia au­di­tors are tasked to do is fi­nan­cial au­dit­ing), we see this sep­a­ra­tion vi­tal and in the in­ter­est of our clients and busi­ness,” says Vo­geler.

Se­condly, there is the threat of un­fair com­pet­i­tive ad­van­tage. As global con­sul­tan­cies such as Ac­cen­ture and Deloitte (both of which of­fer au­dit­ing ser­vices) be­come more and more in­volved in the mar­ket­ing com­mu­ni­ca­tions field, agen­cies are con­cerned that they are be­ing au­dited by ‘com­peti­tors’, thereby giv­ing those com­peti­tors ac­cess to valu­able data and eco­nomics. This in­for­ma­tion could, in the­ory, be used to beat agen­cies at their own game, al­though the big con­sul­tan­cies say they have fire­walls in place to sep­a­rate their busi­nesses. Nev­er­the­less, some agen­cies are con­cerned.

“Au­di­tors need three things: a) ab­so­lute im­par­tial­ity (so can­not be in­volved in the trans­ac­tional chain at all); b) deep sub­ject mat­ter ex­per­tise; and c) ro­bust data points,” says Mark Gay, head of in­ter­na­tional me­dia at Ebiq­uity. “Given that gen­eral con­sul­tants such as Ac­cen­ture, Deloitte, PWC etc. are all heav­ily in­vest­ing in dig­i­tal agen­cies they are vested in the trans­ac­tional chain so they fail on ‘a’. On ‘b’ they could em­ploy me­dia plan­ning and trad­ing ex­perts but there is lit­tle ev­i­dence they do so on any scale. And ‘c’ re­quires long term in­vest­ment in the process, which again is not ev­i­denced.”

Are agen­cies there­fore within their rights to say that an au­di­tor must not be in com­pe­ti­tion with them? “Yes,” Gay states sim­ply. In­ter­na­tion­ally, Ac­cen­ture, which is head­quar­tered in Dublin and oc­ca­sion­ally op­er­ates in the re­gion, has seen its objectivity ques­tioned. Even Ebiq­uity was crit­i­cised by former WPP CEO Sir Martin Sor­rell for hav­ing one sub­sidiary, Fir­mde­ci­sions, au­dit agen­cies over their con­tracts with ad­ver­tis­ers, while other parts of the busi­ness man­age pitches and au­dit me­dia spend. The sit­u­a­tion is fur­ther com­pli­cated by me­dia con­sul­tan­cies or spe­cial­ist agen­cies of­fer­ing eval­u­a­tion of client/agency re­la­tion­ships.

In the Mid­dle East, Med­push, the new­est en­trant into the re­gion’s au­dit­ing mar­ket, de­scribes it­self as a me­dia con­sul­tancy, not an au­di­tor. As such, its of­fer­ing in­cludes me­dia au­dit­ing, agency/ client eval­u­a­tion, pitch man­age­ment and ROI modelling. Samir Ay­oub, the

Au­di­tors need three things: a) ab­so­lute im­par­tial­ity; b) deep sub­ject mat­ter ex­per­tise; c) ro­bust data points. MARK GAY Head of In­ter­na­tional Me­dia at Ebiq­uity AU­DIT­ING AND CON­SULT­ING Au­dit­ing with­out pools is like navigating with a com­pass when you could be us­ing a sat­nav. MARTIN SAM­BROOK Head of In­ter­na­tional Busi­ness De­vel­op­ment and Client Ser­vice at Ebiq­uity With more than 20 clients, Med­push’s pool is com­pre­hen­sive enough for us to be able to use the bench­mark from that pool. SAMIR AY­OUB Founder and CEO of Med­push

Newspapers in English

Newspapers from Bahrain

© PressReader. All rights reserved.