The ANA media transparency report – a marketer’s perspective

Janis Prescott spent 20 years in a wide variety of marketing roles in a blue chip company before joining Financial Progression earlier this year to oversee its marketing activities. Here she offers her perspective on K2 Intelligence’s report into US media transparency for the ANA.

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Trust and transparency in client-agency relationships

From the perspective of any marketing contract compliance auditor, the results of the ID Comms 2016 Transparency Survey are music to their ears.  For Financial Progression, the results mirror exactly the ethos on which the business was established: namely that the more brands understand the financial realities and business models of agencies, the more readily they will find a mutually beneficial way of working together.

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Is it clear where an agency is making money on your account?

When an agency submits a statement of work for a production job or a media plan to a brand team, you would expect that the amount on the piece of paper you approve represents the whole story. Well, not necessarily. What we have found is that the fees from the brand may only be one of the revenue streams present and they are likely to vary by agency type.

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Supplier rebates – how confident are you that your agency is declaring them?

Most brand/agency contracts state that an agency needs to hand over to their client any rebates received from third parties used on their account, whether specific or on a ‘fair share’ basis (e.g. annual volume bonuses). The question is how do you know that you are getting all your rebates back? Our experience tells us that brand teams get short changed more often than they realise. The only way to really know whether you are getting all your rebates back is to do a ‘contract compliance’ or ’financial’ audit. In this article we explore a slightly unusual situation we were faced with recently when doing just that at a large agency.

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‘Big 4 only’ audit clauses outlawed: what’s the impact on your agency contracts?

In April 2014 legislation was approved by the EU Parliament and adopted by the Council of the European Union to make the audit market in the EU more competitive. Key measures are that Public Interest Entities (PIEs) will have to change the audit firms that review their year end accounts at prescribed intervals and the market is to be opened up to firms other than the ‘Big 4’ (PricewaterhouseCoopers, Deloitte, KPMG and Ernst & Young). As a result ‘Big 4 only’ audit clauses in commercial contracts (often loan agreements) that force companies to use one of the Big 4 firms for their year end statutory audit are now “null and void” i.e. completely unenforceable.

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Why we don’t work on a contingent fee basis

Given the fact that we have managed to find money that our clients are owed in 95% of the audit assignments undertaken on their behalf, you may be puzzled to know why we don’t work on a contingent fee basis, and even more so when it isn’t uncommon for us to find that our clients are owed in excess of £100k…

There are many reasons why we have taken this stance. In this article, I explain in a little more depth why we have taken this seemingly uncommercial position.

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There’s more to this contract compliance audit lark than just money…

When done in the right way, contract compliance audits of marketing services agencies deliver far more value to both client and agency than simply identifying accounting errors.

That was the message delivered by Philipp Schuster of adidas Group at the ProcureCon Marketing Conference held in London in June.

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You can play with my train set…but not the engines

Cast your mind back to your toughest ever panel-based job interview? Now make it even tougher and it will pretty similar to the grilling I received a few months ago from the European FD of a global agency network and his UK counterpart. This was before we had even started the audits of their agencies!

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4 sensible questions to ask when working with small or young agencies

During the past year we have had the opportunity to audit some small, independent and relatively young agencies in a number of different countries across Europe and in the USA. This has been a learning experience for both us and our clients. Here’s why: standard brand/agency contracts are often based upon a standard contract available to members from ISBA, the ANA or their equivalents in other countries. That is, on the whole, very positive. Standard contracts, however, tend to be more suited to mid-large sized, established agencies that have the systems and processes in place to comply with all the terms within the contract, particularly the ones related to record keeping.

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You say potato, I say potahto

As the line goes in “Let’s Call The Whole Thing Off” sung by Fred Astaire and Ginger Rogers in their 1937 movie “Shall We Dance”:

“You say “either” and I say “either”

You say “neither” I say “neither”

“Either” “either”, “neither” “neither”

Let’s call the whole thing off

You say “potato,” I say “potahto”

You say “tomato”, I say “tomahto”

Oh, let’s call the whole thing off”

You say “mark-up” and I say “margin”… and does it really matter?

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