Sunday, June 1, 2008

Media Auditing and the Advertising Industry

Best bang for your ad buck

Spatial Access was started by Meenakshi Madhvani and Prof Claudio Conti, an Italian mathematician. It claims to be India’s first media audit firm. It measures if advertisers are getting value for their money.

TO A CASUAL reader, a company like Spatial Access can be difficult to describe. It’s in the field of media audits and more recently, media analytics, a concept that was arcane to the media and advertising industry till not so long ago. Spatial Access was started by Meenakshi Madhvani in tandem with Prof Claudio Conti, an Italian mathematician, in 2003. The former, a media and advertising professional, had previously set up global media agency Carat’s local operations. So what does it do? Quite simply, it is trying to bring transparency, measurement and order in the black hole that is advertising. Says Ms Madhvani, “Our approach is very fundamental — use data, use technology and in-house tools to deconstruct the data, and finally use experience to overlay the softer issues and draw value judgements.” The total advertising spend in the country amounts to Rs 16,000 crore, and advertisers (or clients, as the industry refers to them), are often not aware as to how exactly their money is being spent by media agencies.

Finally, marketers also have to show their company board that the money spent isn’t going waste. This is where Ms Madhvani and her staff of 25 statistical wonks help the client, measuring efficacy of advertising, and whether the objectives, in terms of reaching out to a certain target audience and a certain number of people could have been done differently and more importantly, cheaper. There is hardly a media audit industry in India, while in advanced markets like the US and UK, media audits are fairly commonplace. Accenture is a global leader in the business.

So how does media auditing work? Naturally, not every ad that’s printed and appearing on TV can be tracked manually. Hence, Spatial Access had developed in-house software to scrutinise data from Television Audience Meter (TAM) and ascertain what ads have appeared where. Once that bit of crunching is complete, Spatial Access cross-checks to see if the advertisers actually get what they’ve paid for. It doesn’t end there. Media agencies get free or discounted spots which they don’t often pass on to the client, so clients often get the short end of the stick. It would eventually mean that the media agencies would have to be more forthcoming about the rates they’re getting from media owners, and advertisers would want to benefit from discounted spots as well.

MEENAKSHI MADHVANI Managing Partner, Spatial Access

Needless to say, the sort of scrutiny that a media audit requires had advertising and media agencies up in arms. “There was a huge concern within the industry, and everyone straightaway dismissed the concept of auditing. Despite being an industry whose raison d’ĂȘtre is change, the industry resisted change,” says Ms Madhvani. Spatial Access’ most vocal critics came from the biggest media buying agencies — Group M, the consolidated media arm of the WPP group, and Madison, one of the few independent Indian media agencies, headed by Sam Balsara. But more worryingly, even advertisers saw little merit in employing a media auditor, and most media owners insisted that advertisers were aware of where their money was going. But Goodlass Nerolac and Bajaj Auto signed on anyway to figure out how their marketing communication investments were faring. According to Ms Madhvani, “After four years, they’re still our clients, and that’s a big thumbs-up for us.” Rajiv Bajaj has said that Spatial Access has helped him save a lot of money on his advertising. The company struggled to make money at the end of the first year, but it was cash-flow positive from the second.

Spatial Access is now branching out into services across the breadth of marketing communications. It has recently taken on the role of pitch consultants, advising clients looking to appoint a creative agency. Again, in an industry where measurement of efficacy isn’t extremely high, the team has developed tools and defined measurable parameters for clients to pick a creative agency after a pitch.

According to Ms Madhvani, “This works fine for a creative agency as well since there’s standardisation and they know they won’t be arbitrarily rejected.” Finally, the media analytics business has been picking up pace, and research and tools that are developed in India has been extended into four other countries — Thailand, Russia, Greece and Italy. Over the past year, three of the biggest media auditors from the UK — Billettes, EMM, and SLE — have all formed tie-ups with Spatial Access.

It’s only recently that a few advertising agencies have begun acknowledging that perhaps media audits are good for the industry. As advertising budgets get bigger and media gets pricier, clients will want to know whether they’re receiving bang for their buck. That’s when Spatial Access could get crowded out by one of the Big Four accounting firms, which are as well equipped as anyone to audit media spends. But for now, Ms Madhvani and Spatial Access are perhaps the only team focused on this niche.

Article Resources:

Irshad Daftari is the Chief Editor in the The Economic Times, Mumbai and the article appeared in one of their successful columns on Entrepreneurship/Startups called "Starship Enterprise". For more information on Spacial Access log on Successful Entrepreneur - Media Auditing

Who needs Media Auditing
Any Advertiser who:
  • Looks at Marketing spends as investment and not as expenditure.
  • Is interested in increasing ROI on all communication.
  • Large Organization with multiple SBU's across geography.
  • Deals with multiple service providers and vendors.
  • Is in the process of shifting from one service provider to another.
  • Requires benchmark costs, quality and value evaluation.
  • Is interested in tracking marketing performance over a period of time.
  • Is interested in driving internal processes to improve marketing returns.

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