By Paula Loverich
Remember when "advertising" meant TV, radio, print, outdoor and direct response? When, in the famous words of advertiser John Wanamaker, "Half the money I spend on advertising is wasted; the trouble is I don’t know which half?"
Then along came digital, with its promise to transparently measure every view, click and purchase. And somehow, that got us to the point last year where advertisers and agencies were at war over transparency. There was a collective gasp across the industry in January 2017 when P&G's Marc Pritchard blasted the media supply chain as "murky at best, fraudulent at worst." Results were quick to follow. By July, the Association of National Advertisers reported that more than 60% of agencies were taking action to address transparency, based on ANA guidelines issued earlier that year.
If transparency is no longer up for debate, agencies are still stuck with straightening out the "murky" media supply chain. Agencies need to find the right balance between making their processes transparent on the one hand and making them too complex, unwieldly and costly on the other.
The Heart of Transparency
In buying and billing for media in all its forms, transparency depends on many things: and key is the reconciliation process that matches incoming invoices with the buy. That's crucial to ensuring that the estimated cost meets the real cost, which is what ultimately matters most to the advertiser. Being able to document both clearly and quickly creates trust – which is what "transparency" really boils down to. Trust is at the heart of transparency.
Anyone inside a media buying operation knows how it can go. Somebody forgets to enter or change a buy and invoices start arriving that can't be matched to an order. The person who approved the buy/change is away or has left the agency and records are a mess. Invoices arrive but vanish in somebody's inbox until the media provider threatens to suspend service. The CFO demands reconciliation and everybody runs around with their hair on fire to get it done.
There is a much better way, however, based on one simple idea; Automation of Media and Treasury Operations, including Vendor Payments. So, why isn't the processing of media buys and bills automated?
The answer, back in the day, was that the technology was not mature enough and was too expensive. Today, that's a myth. However, any old invoice automation solution won’t work for Media. Invoice automation for Media, done right, delivered as a cost-effective service, can make sure that every incoming invoice is captured correctly and fuels an efficient reconciliation workflow. It can instantly flag discrepancies so they can be resolved in hours instead of weeks. Automated workflow in the cloud sends invoices to the right people for review and keeps prompting until invoices are approved. Dashboards give managers real-time visibility on the process. Invoices are paid on time; while clean, accurate data flows into accounting systems for billing, providing transparency for your clients.
“I know this because IPS provides financial supply chain management solutions to organizations in pharma, manufacturing, technology and other industries and we know the additional challenges that agencies face. For more than 20 years, many of the top names in the agency world count on IPS' Productivity Wrx℠ for Media“ stated Greg Bartels, IPS President & CEO.
Advertising passed an historic milestone in 2016, when digital advertising surged 22% to $72.5 billion, and surpassed TV's $71.3 billion share. When change happens this fast, there are bound to be problems. Agencies are stuck with those problems – but they are also in the perfect position to bring media buying into the 21st Century and give clients the transparency they deserve.