Perfect Digital Storm: Do You Have Visibility?

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A perfect Digital storm is swirling and the Media sector will be feeling a little hot under the collar as we head deep into the least quarter of 2018. This will not be a vintage year as the wrath of regulators and law makers flex their expanding muscles into the global Media space. The troika of agencies, publishers and technology platforms are all under the spotlight. Do you have full visibility of contracts with agencies, tech vendors and publishers?

The European Union concluded their rigorous investigation into Google and its anti-competitive behaviours with the Android operating system. The outcome was a $5 bn fine for Google over ‘serious illegal behaviour’. This is on top of a previous $2.3 bn fine over its shopping comparison service. Plus, Google is also currently being investigated for its AdSense product. More recently in the US, the FBI which investigates national security and federal law violations is probing into media buying practices as a follow-up to the ANA investigation back in 2016. And if the UK was feeling left out, there is a strong possibility that they can join the storm too via some developments with the UK competition regulator. The Competition and Markets Authority is reported to be ‘actively considering’ an investigation into the Digital advertising market, after the debacle of Cambridge Analytica and the fallout from Facebook.

So how do clients and their Marketing departments, who have not already started to address the challenges with transparency, take back control of their Media budgets as 2019 is rapidly approaching? Do clients have visibility of their contractual relationships in the Digital space?

We are seeing advanced advertisers proactively re-booting and upgrading their contracts with agencies, relationships with publishers and dealings with vendors. The Digital supply chain and Programmatic fees are favourite subjects for deep dives but the transparency debate is much broader than this. To get into the right lane we believe that clients have a few immediate-term options they can actively consider and in a perfect world, consider all 3 routes;

1.Conduct a review of their current Media agency contract to gain a clear understanding of:

-IP ownership of the product of agency work such as strategies, plans and negotiated rates

-Billing and payment terms

-Right to all discounts and benefits provided by the media

-Transparency of agency brokering, barter, and Agency Volume Bonuses (AVBs) where applicable

-Right to audit

-Cost and quality benchmarking

-Ensuring that contracts are executable, measurable, and easy to maintain over time

-Providing full visibility of the digital supply chain with specific focus on the Programmatic AdTech stack

-Digital delivery hygiene including Viewability, Brand Safety and Ad Fraud

-Programmatic fees evaluation

-Data ownership provisions e.g. 1st party and 2nd party data

-Performance related fees

-Agency scope and ways of working

2.Conduct a review of direct deals with technology vendors

-Breakdown of all MarTech contracts and costs

-Billing and payment terms

-Data ownership terms and conditions

  1. Conduct a “financial control audit” which would focus on the following:

-Confirm delivery against negotiated media guarantees to determine if ADUs (makegoods) or credits are due

-Review invoices to ensure costs agree with negotiated rates

-Compare invoices against “proof of performance” reports, where available

-Check invoices to identify errors, discrepancies, overpayments, makegoods and credits

-Proper clearance of discrepancies

-Reconcile payments made to the agency against payments made to the media

-Review float or other contractual conditions related to payments

If you would like help with your media or more information on Flock please contact – julie.marshall@flock-associates.com

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