AAAA Media Auditing Situation Analysis

October 8, 2007

AAAA

Date: October 3, 2007

From: AAAA Local TV/Radio Committee


To: ANA TV Advertising Committee

Subject: AAAA Media Auditing Situation Analysis

Overview

The Committee's main issues with media audits are the lack of industry best practices for auditors and that there is no third- party oversight for auditors.

The above has created a situation whereby each auditing firm has the opportunity to develop their own guidelines. The AAAA Local TV/Radio Committee has met with several auditing firms to discuss each company's process. It is clear from these meetings that each auditor works differently and has their own opinion of how media should be planned and executed. In fairness, some do follow industry standards as they have more knowledge of media buying but much is left to their interpretation and sometimes reinvention of industry practices. This can be broken into two categories: guidelines and methodology.

Guidelines and methodologies should be discussed and agreed upon prior to the start of an audit by the client, agency and auditor.

Guideline Issues
Buys should be audited per the approved client guidelines and general industry standards. For example:

-daypart definitions
-posting parameters (i.e.,break averaging, market delivery)
-cpp evaluations (SQAD)
-program/restrictions
-minimum/maximum ratings


 

10/3/07

ANA TV Advertising Committee

AAAA Media Auditing Situation Analysis


Methodology Issues

-data used for cost benchmarking (SQAD or other sources. For example, auditors

proprietary cost data base.)
-industry accepted break positions
-default surveys (Using October to post September)
-non-standard time periods (11:00 -11:35pm)
-posting outside of sweeps (sports, specials)
-system used for audit and/or posting

The questionnaire on the following pages may serve as an advertiser's checklist when choosing a media auditing company.

 

AAAA Advertiser Questionnaire for

Media Auditors/Consultants

A. Organization

  • How many employees are in your organization?
  • What level of experience do they have (buyer, biller, client service, planner, etc.) and in what areas of media (spot, network, print, DR)?
  • What is the average number of years your employees have been in the media business?
  • Is experience hands-on or supervisory?
  • How many employees are involved in a standard audit?
  • What role do they play?
  • Provide organization chart detailing overall organization including titles.
  • Provide organization chart for this assignment.
  • How many years has your company been in business?
  • How did your business evolve? (Accounting firm? In-house agency?, etc.)
  • If you are a public company, who are your partners?
  • Do you practice full disclosure?
  • Is all work done on premises? Is anything farmed out to a 3rd party for data inputting, etc. If yes, explain.

B. Auditing Qualifications

  • What primary benchmarks do you use in your audit evaluations? Please specify differences for each media type. (Example: CPP efficiency, GRP delivery, etc.)
  • How many accounts do you audit annually?
  • How big is your current client roster? Of this list, how many short-term clients vs. long-term?
  • How diverse is your client roster? What categories do you cover?
  • What categories does your client roster include (entertainment, retail, packaged goods, etc.)?
  • What is the average number of markets per audit?
  • What is the average expenditure per audit?
  • Does your organization contract to purchase ad time/space for clients independent of your audit duties?
  • If buying is a function of what is planned, how or do you audit a plan?
  • Provide references.

C. Compensation

  • What compensation terms do you employ?
    • Fee?
    • Fee plus bonus? (What would bonus be based on?)
    • Other? Please be specific (example: recovery).

D. Experience with third party providers

  • # years and agency Hands on or supervisory with:
  • Hands on or supervisory with:
    -DDS
    -IOS
    -Adware
    -Strata
    -Other ?
  • Do you work with any monitoring services? If so, which one(s)? What type of confidentiality clause do you have with them?

E. What computer system is used for evaluation?

  • If proprietary, provide an overview of system capabilities.
  • Do you work with agency via electronic transfer?
  • If yes, do you have data file written for agency to follow?

F. What methodology is used in a typical audit?

  • Are agency affidavits input into auditor's processor?
  • Describe the posting methodology.
  • Break averages?
  • In-sweep and out-of -sweep schedules?
  • Use of overnight data for evaluation?
  • Detail any differences between auditor's methodology and other major third-party providers.
  • For television, do you use all surveys for a market?
  • Is your benchmarking based on pure data or does it include conversion factors calculated from another demo?
  • How do upfront buys calculate into the benchmarking data?

G. Data sources

  • To which sources and products does auditor/consultant subscribe?
  • Nielsen Examples
    -VIP - 210 DMA's (reporting period dependent upon market)
    -NSI HH overnight ratings for metered markets
    -LPM data for applicable markets
    Sweep Reports:
    DMA Audience Allocation Report
    DMA Planners Guide
    DMA TV Trends by Season
    Market Daypart Summaries
    Network Programs by DMA
    Report on Network Syndicated Programs
    Total Activity Report
    VIPS for Black (40+ DMA's) and Hispanics (16 DMA's)
    Software:
    NSI Navigator
    NSI Galaxy Profile
  • Arbitron-examples
  • SQAD (If yes, how many issues a year, all levels?)
  • What happens to the data once the audit is over? Is the data used to populate a prorietary database? If so, what all is included in the database and how do you use it?
  • Do you keep all information obtained in an audit confidential and use it only for purposes of the audit?

H. Expectations

  • If you audit spot TV or spot radio, what are the acceptable delivery ranges you suggest?
    • Industry standard
    • Other?
  • At what level of detail?
  • Market, daypart, stations, etc.?
  • Provide support for expected percentage.
  • Explain how agency stewardship would guarantee percentage
  • What information does agency need to provide?
  • Will auditors adjust any agency information transferred? (e.g., daypart codes, ratings adjustment, etc.)
  • If yes, will rationale be provided to agency prior to client presentation?
  • Is audit completed with or without agency involvement? Will auditor discuss explanations with agency in advance regarding discrepancies between agency/auditor reports?
  • Please provide an overview of the timeline for a typical audit, including a list of reports, when they are issued, and appropriate formats.
  • What method(s) of data transfer from agency to auditor, and auditor back to agency, is being used?
  • Do you issue "client/auditor guidelines" to agency so that all expectations are clearly communicated?
Source

"AAAA Media Auditing Situation Analysis." AAAA Local TV/Radio Committee, 10/03/07.