Buyers at Four A's Call for Media Verification Audit

BY JON LAFAYETTE Media buyers are about to put cable networks under the microscope to see if they’re getting the spots their clients are paying for. At the American Association of Advertising Agencies’ annual media conference and trade show in New Orleans last week, Renetta McCann, CEO of Starcom North America and chair of the Four A’s media policy committee, said the accounting firm Ernst & Young had been contracted to conduct a media verification audit. The audit will determine the size of the variances found between the schedule of commercials that actually run and the amount billed for spots recorded on invoices. Some analyses have found that the difference can be as much as 20% in cable. A similar rate of variance has been found in local broadcast. The most accurate media tends to be national broadcast, and even there, variances can be as much as 5% to 10%. Some buyers and clients have been complaining that they’re getting billed for spots that don’t appear where they’re supposed to. The variances can be as simple as spots that didn’t run or as egregious as asking agencies to pay when a competitor’s spots ran. In addition to the audit, the media policy committee will put together an ethical code of conduct for the media and establish formal procedures to ensure that schedules and invoices agree. “We need to take a no-tolerance stance when the possibility of wasted client dollars is present,” McCann said. “This issue impacts us all: media agency, media company and client. It’s too big for a single company to conquer, and that’s why we need to address it at an industrywide level.” Larry Goodman, head of ad sales for CNN at Turner Broadcasting, said the concern about proper invoicing wasn’t keeping buyers from using cable for their clients. “I think most cable networks will stack up fine,” he said. Goodman said a bigger issue for cable was making the buying process as easy and inexpensive as broadcast. The cable industry, he added, has to move more toward electronic invoicing systems. “The industry has no choice,” Goodman said, and a good system will not only “expedite the buying, but expedite payments as well.” Unfortunately, the media and advertising businesses are divided over who would foot the bill to create the technology for an electronic invoicing system the entire industry could get behind. The theme of last week’s conference was “Media in a Time of Change,” but much of the talk was about how things weren’t going to change. “Paid media is here to stay,” said McCann during the meeting, adding that the “death of the upfront has been greatly exaggerated.” Nevertheless, she added that digital technology, including PVR, was giving consumers increasing control over entertainment and “creating a new reality.”