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By Fiona Foy
Media Marketing Compliance’s Fiona Foy explores what marketing and procurement need to review as inflation soars
Enabling Honest Working Relationships
“Through accommodating the compliance audit and opening its doors to the engine room, the agency is sharing with the client the dynamics involved in its treatment of their marketing budget”
As if the last two years haven’t been enough for each of us, now we’re heading for the highest rates of inflation seen in years and tough times are ahead according to the daily headlines.
C-suite are openly discussing their business challenges, looking for new and innovative ways to optimize return on investment and drive efficiencies with contributions to hit this fiscal year.
On the other hand, the network agencies have a very positive outlook with most in their H2 2022 results, upgrading their 2022 growth guidance for the year end and declaring double digit year on year growth. How can this be achieved if their clients are facing an increased cost base, supply chain issues and potential declines in sales?
Marketing tends to be the first budget to be cut when an organization is seeing hard times ahead. So how can the marketing and procurement teams prepare and align internally to maintain marketing’s budget and how can the agency maintain its growth trajectory – knowledge sharing.
Marketing and procurement fully understand the ‘what’ of the agency relationship – what brand value has been achieved, what CPA/CPM delivered, what business KPIs the agency delivered through the approved campaigns, but few can provide the detail of the ‘how’ the agency accomplished such.
How did the agency actually spend the marketing budget to deliver those targets? How did the agency compensate their vendors? How did the agency resource my account across the year?
To get to the most rewarding picture of the how scenarios, involves the knowing and tracking of every advertiser dollar the agency has committed through the complex ecosystems created over the past few years. For those that truly want to protect their marketing budget and deliver value back into their business they need external help to get beyond the shiny façade presented by the agency and deep into their operations, which only an auditor is granted access.
Marketing compliance auditing is provided by independent marketing specialist auditors, such as MMC, which brings significant value add for the advertiser. The auditors track the journey of the advertiser’s dollar through the myriad agency partners and related parties, outlining the services provided, actual costs incurred vs charged to advertiser, hidden mark-ups, cross-campaign funding, FTE and freelancer costing, incentives withheld and other non-compliant contractual practices as some of the more obvious contributions an audit can uncover.
C-suite will surely sit up and listen as the marketing and procurement teams share details from the audit of funds for immediate and future return, noting areas of improvement delivering significant operational value and business protection in the short and long term – clearly demonstrating marketing’s understanding of the business need to drive efficiencies through its budget management in conjunction with improving brand recognition/loyalty, sales growth etc. as some of its typical KPIs.
With the advertiser’s expenditure alone being the single largest contributor to the success of its agency partner the agency naturally needs to protect this revenue to achieve its targets. Through accommodating the compliance audit and opening its doors to the engine room, the agency is sharing with the client the dynamics involved in its treatment of their marketing budget.
This sharing of knowledge facilitates a more open, robust and honest working relationship between the advertiser and the agency to ultimately help protect the marketing budget and agency revenue moving forward.