The relevance of media auditing has been challenged of late. In an article for The Drum, our CEO Fredrik Kinge agrees that the old-fashioned way of auditing no longer meets the requirements of the modern marketer. However, he goes on to explain that a modern, forensic approach to media audit – an approach that takes into account an increasingly complex and rapidly changing landscape – is more relevant than ever.
Here’s an excerpt from the article:
Auditing must modernize and take a more granular approach to harnessing pool data: one size no longer fits all. A KPI framework that optimizes the advertiser’s ROI and strengthens their ownership is crucial: modern auditing needs to incorporate quality KPIs and spend effectiveness in order to deliver value to advertisers. One of the main accusations levelled at auditors of late is that they are unable to effectively audit digital and programmatic advertising. But it is very possible for contemporary auditors to audit digital and programmatic. Of course, a deep understanding of digital media and technological advances is crucial, as is the ability to adapt to a rapidly changing landscape and apply that understanding to auditing practices.
Whether or not media space is purchased at auction, the fundamental components of good media planning and buying remain. Did the agency recommend the best media strategy, including the most cost efficient and well-negotiated investments and buying settings? Was the media plan delivered as agreed? Did the agency use their discretion to optimize ROI by, for example, shifting investments between audiences, dayparts and contexts? It’s always worth remembering that just because something is biddable doesn’t mean that it is automatically optimal and cost-efficient for the advertiser, in line with the campaign brief.
Proper evaluation of media agency performance must maintain 100% focus on the advertiser’s brief and what is possible in the market. That means evaluating the efficiency and effectiveness of the agency’s work and decisions within those constraints.
Read the full article here.
By Victoria Potter, US Business Director at ECI Media Management
The current media landscape is complex and ever-changing, thanks to constant technological advances and a dynamic economic context. It’s an exciting yet challenging time to be a marketer: with so much consumer data to leverage and so many channels to choose from, how do you ensure that your advertising investment is working hard to build your brand and drive sales?
Working with creative, media, tech and data specialists is of course a given: from concept to execution, working alongside experts will help you to ensure that your strategy has the best chance of reaching the right audiences, and resonating with them. But to learn from your campaigns, you need to conduct a media audit.
The traditional method of media audit is to use the pool to benchmark the advertiser’s spend to understand whether their media buy has delivered good value. However, pool benchmarking only scratches the surface of how data can help advertisers understand the efficiency of their advertising investment. Our forensic approach to auditing goes beyond the pool approach: it is more strategic and focuses on achieving the client’s goals, not just whether good value was achieved. As media fragmentation becomes more prevalent, KPIs such as targeting and coverage are key drivers of greater efficiency and value. This allows us to understand the sweet spot of hitting the audience from the targeting, reach and cost perspectives, and to provide actionable insights into how they could buy better for their next campaign.
As modern auditing needs to incorporate quality KPIs and spend effectiveness in order to deliver value to the advertiser, we establish a bespoke KPI framework that optimizes the client’s ROI. We’re agile, digital-native and independent: ever since our formation we have championed a modern approach to media auditing so that we can help our clients to not just navigate the increasingly complex media landscape, but to benefit from that complexity.
Never has it been so important to optimise media buying and reach the right audiences in the most efficient way. The TV landscape is undergoing momentous change: audiences are fragmenting as the number of streaming platforms multiplies, many of them ad-free. Ratings on linear and OTT TV are deteriorating but, but the cost of advertising is still inflating (see our latest inflation report for more insight and context). This means that being present on the wrong programming carries higher stakes than in the past: there is nothing more expensive than buying the wrong strategy.
In the complex modern media landscape, change is the only constant, and keeping abreast of that change is the only way to win. Advertisers must understand how to make their ad dollars work as hard as possible in order to maximize effectiveness – and a modern auditor can help that to happen.
At ECI Media Management, our approach guarantees higher media value than the pool approach, as it is specific and tailored to our clients’ needs.
WeWork has been lauded by many as one of the huge success stories of the 21st century. Before they came along, renting office space was run-of-the-mill, boring. You paid money, you got a room and installed some desks, some chairs, a printer. You moved in. That was it.
WeWork, however, wants you to believe that you aren’t simply paying for space. Of course, you get a beautiful new office, but you are also paying to be a part of something new, part of a community of like-minded people. Indeed, part of WeWork’s mission is that it is “a place you join as an individual, ‘me’, but where you become part of a greater ‘we’.” WeWork positions itself amongst those big disruptors of this century – Netflix, Uber, even Facebook, and an IPO was a natural next step for this real estate/tech behemoth.
Dreaming of a huge $47 billion valuation, the cash-hungry We Company, WeWork’s parent company, aimed to sell enough shares to raise $4 billion and had, according to the New York Times, ‘lined up a $6 billion bank loan that was contingent on the IPO’. By the end of September, though, those heady days were over. WeWork discovered that investors were sceptical about their huge valuation, large amounts of debt and corporate governance issues. They pulled the IPO, Founder-CEO Adam Neumann was forced to step down, are looking at redundancies and are reconsidering their expansion strategy into China.
So how did WeWork value itself so high? What was it doing right? A lot of it came down to brilliant brand-building and marketing. As touched on earlier in this piece and explored by Mark Ritson in this article, WeWork didn’t position itself as a real estate or office rental firm. It wanted to be seen as a tech firm, or, as Ritson says, there was a “vague, socially-constructed idea that this is another big disruptive tech firm with another massive IPO.” 21st century tech firms have of course seen phenomenal success over the past two decades, and many have an aura of community and purpose to humanise the vast profit they turn over. WeWork, with its mission to ‘Create a world where people work to make a life, not just a living” embodies that tech ethos, and as such pushes its community app. This wasn’t just a forward-thinking branding decision: if it worked, it was a sage financial decision, with tech companies raking in revenues far higher than those of more traditional businesses.
From the outside, this approach seemed to be working for WeWork: in the first half of 2019, for example, it earned $1.5 billion in revenue. However, the gloss loses its sheen a little when you discover that in the same period it lost almost $900m. And the sheen disappears completely in the context of information that it was looking to raise between $3 billion and $4 billion in debt to tide it over.
And that’s the key to this story: the losses and associated debt. While investors don’t necessarily insist that start-ups are profitable before they go public, it helps to be able to show a path to profitability. We Company’s revenue and operating losses are moving in tandem, rather than showing an increasing gap. They may find some cold comfort in the fact that they aren’t alone in this plight: ‘fellow’ disruptors Netflix and Uber, to name just two, show no sign of becoming profitable in the near or even mid-future. Netflix must continue its huge investment ($15 billion this year) into original content in order to survive stiff forthcoming competition in the shape of Disney, Amazon and Apple. To finance that, Netflix is estimated to have a debt of around $12 billion – and with a net income of just a twelfth of that, it seems unlikely that it will ever be able to pay that off.
Is WeWork’s failed IPO the first sign of a difficult, uncertain future for the big disruptive organisations of the last 10 years? Perhaps the tech disruptors of the future will bring the focus back to business strategy and creating revenue streams. Brand positioning and purpose are of course crucial to a business’ success, but they must be founded in a robust business and financial strategy to guarantee success.
Disclosure: ECI Media Management’s UK office is a tenant of WeWork in London