It has dominated the headlines of advertising news lately. IPG Mediabrands agency won ITC media warrant estimated at INR 500 crore. In another recent development, agency Publicis Groupe Zenith has retained the Nestle account estimated at INR 700 crore.
With big budgets comes greater accountability and more control from customers. Research by the World Federation of Advertisers in association with media audit agency Firm Decisions has highlighted some of the best practices that clients and agencies could adopt for a better future.
Among other things, the study recommends that the Master Services Agreement (MSA) cover all entities in the agency group, not just the Agency of Record (AOR). The reasons are quite simple. As the study notes, agency holding companies often have many companies within the group that work on client businesses, such as the business division (where vendor contracts reside), programming, media inventory, digital and influencer marketing, among others. It is best to ensure that the entire group operates under a single MSA contract, the study notes.
Another big development in recent years is the emergence of digital as the most important medium. Industry reports indicate that digital will become the largest medium in India, accounting for a 45% share of India’s INR 1,00,000 crore advertising pie in 2022.
The WFA-Firm Decisions study highlights the importance of ensuring that a client’s digital operating framework covers ad verification, which should include brand safety, ad fraud, viewability and extent, as more and more clients seek to grasp the complexities of digital media. in their respective media agency contracts.
The study urges customers to use the Digital Spend Measurement Framework on four metrics: setting standards on inventory quality, clear definition of ad fraud and viewability, adhering to a industry listed in the contract, brand safety guidelines including whitelists and blacklists and finally on ad serving.
Another major area of focus will be inventory media. Inventory media is defined as media that the agency purchases at its own risk and thereby creates its own inventory of such media.
By doing so, the agency then becomes the principal and can sell this media to its clients at any price it can negotiate, regardless of what it cost the agency to acquire it or its true market value. Inventory media are neither transparent nor auditable, according to the WFA study. Globally, there is a clamor to subject inventory media to strict audit clauses. Currently, advertisers and their listeners cannot see the true cost and do not earn any discounts or other purchase benefits (such as uncharged media) from these transactions, the study notes.
Obviously, while agencies can celebrate their business victories, in the end, it has to be a win-win situation for everyone.
(This weekly column offers insight into the discussions, debates, and soul-searching that go on in the minds of our writers.)