The relationship between advertisers and agencies has been under high scrutiny in recent years, with the increasing prevalence of in-housing a reflection of this. However traditional methods of media auditing have not kept up with the rise of programmatic advertising, potentially leaving clients in the dark over the true value of the relationship with their agency partners.

Writing exclusively for ExchangeWire, James Duffy (pictured below), head of paid media at agenda21, discusses why traditional forms of media auditing are no longer appropriate for programmatic advertising and what alternatives need to be explored.

The end of traditional media auditing

The traditional way of auditing media is no longer fit for purpose. In today’s media landscape, where marketers want to understand value across brands and performance, online and offline, and are increasingly using programmatic-led auctions, the old ways of price-led auditing are of little use. John Billets, who effectively conceived the discipline of media auditing, himself has admitted that traditional pool-based media benchmarking is "flawed". New means and methods of media auditing have emerged, yet none of these have managed to grasp a stranglehold in the market.

At agenda21, we have strong relationships with our clients, built over years of trust, whereby our clients know that we are buying media at the right rate, at the right time. Other clients should follow suit, forgoing the use of an external, sometimes unproven, media audit and entrust their media agency to drive maximum value.

James Duffy, head of paid media, agenda21

The traditional media audit, pool based auditing, was built on simplicity: the pooling together of a group of advertisers. The ad spend was tallied up in one medium in a set period and then divided by the sum of the audience delivered, thus deriving at an average value. This provides a measure against which individual advertisers could be compared and contrasted.

An alternative auditing method, called value tracking, validates the actual media prices against the media agency price commitments coming from the agency pitch. But a media world based on pricing that is agreed in advance is not the norm anymore, so neither of these auditing methods are fit for purpose when bids for ads are occurring in real time. Furthermore, thorny issues such as viewability and brand safety can be exacerbated by audits that benchmark cost at the expense of its quality.

The rise of programmatic

The whole premise of programmatic is that you can be incredibly flexible what you pay for ads, based on things that are difficult to audit. For example, it might be that the person you are targeting is incredibly in-market for a particular product so you will spend five, six, even ten times what you would normally spend.

What do marketers and agencies want today?

Today, marketers want to understand value across brand and performance, and the most successful campaigns align price to the outcome. Marketers want auditors who can pool together a bunch of metrics, including effective use of data, quality, transparency and optimisation in an audit.

But in an increasingly programmatic world, this is difficult with so many variables, a situation likely to get worse as other media like outdoor and TV goes down this channel. And while some media agencies view auditing and benchmarking as a positive way of demonstrating compliance, some have raised fears that media auditors might misuse confidential data to inform clients and have also complained about a lack of independent regulation.

Alternative auditing models

Amid much uncertainty about the value of the media audit, forward-thinking advertisers are demanding alternative solutions. For example, Deutsche Telekom has opted to opt for a consortium of auditors that will split the media auditing and evaluation responsibilities across Europe, while Heineken has hired Dutch company Digital Decisions to provide source data monitoring services as opposed to price benchmarketing.

Is auditing a positive?

If any agency is doing its job, then the client should feel the value every day of the week, whether that be in performance or consultancy process. It is those clients which are clear on how they measure performance, who will be able to better audit the value that their agency relationship provides. For this reason, I would argue that for some brands, particularly SMEs, the use of an external media auditor is not needed.

By entrusting that the media agency is making the right decisions, the relationship between agency and client can only grow stronger. Saying that I do understand for bigger brands, an external media audit can be a desired option to evaluate the performance of an agency.