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Fundamental Significance of Media Audits ~ Disappearing Media Auditors in the World2018.11.27

SPI, a pioneer of strategic/statistical media planning/analysis & Media buying audit sector in Japan,
encouraging ‘optimizing marketing ROI’ and ‘achieving transparency / accountability,’ has analyzed:

  • The fundamental significance of the media audit
  • Current status and future prospects of media audit in Japan and the world

Please have a look at the details.

1. The fundamental significance of the media audit

What is a media audit?

A media audit is:
  • A precise diagnosis/analysis for advertiser media buying from professional & independent 3rd parties
  • Grasping of facts by objective experts and fulfilling accountability
  • Finally, ‘Evaluating investment in corporate growth and formulating an action plan to maximize investment efficiency’ while specializing in media purchasing (media buying)
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Three types of media audits
Technically, a media audit ‘audits / validates / assesses the media-purchase (=media-buying) of an advertiser based on facts by a professional / independent 3rd party, via the following:

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Fundamental significance and merits of the media audit
The media audit finds the ‘Validity, Level and the Room to improve’ of:

  • ‘Cost efficiency, exposure volume (delivery vs plan), quality and total performance’ as your purchased / bought media space
  • ‘Service quality (agency SOW, such as media planning), fees, contract content’ with / from your media agency
  • ‘transparency issues’ involving the processing of media invoicing, cash flow, accuracy of payment and exposure of media reporting and media invoicing (from media to media agency)

Therefore,the fundamental significance and merits of the media audit are defined as a: Precise diagnosis / analysis for advertiser media buying from a professional & independent 3rd party, delivering correctly grasped facts and fulfilling accountability

which finally:

executes ‘Evaluation of investment in corporate growth and formulation of an action plan to maximize investment efficiency’ while specializing in media purchasing (media buying).

2. Current status and future prospects of the media audit in Japan and in the world

Disappearing media auditors in the world

The media audit has long been a common process in Europe / western countries in achieving corporate accountability in media buying, a process which has also expanded to Japan slowly but surely mainly via the ‘questioning of the efficiency of media spends’ and the ‘importance of accountability to stakeholders.’

However, media auditors have currently been disappearing around the world.
There are two types of media auditors / consultants in the world - one is the media specialist, and the other is one of the functions of management consulting companies (also called business consulting companies).
Notably, media auditing as a function of management consulting companies has been rapidly losing its independency from media and media agencies as such companies have created and owned ‘media agencies’ in their holding groups to expand their businesses.
It is quite a simple business strategy for management consulting companies to shift from media auditor to media agency functions. In fact, being a media agency dealing with the whole media spend / budget of advertisers results in much higher gross revenue gains (20-100+ times higher) compared to just being a media auditor.
However, we can never call companies with media agencies in their holdings or groups ‘media auditors.’ It should be noted that such companies have officially announced that they have established media agencies as their new business pillar.

SPI has partnerships / good relationships with independent global media specialists. One of our most popular hot topics is ‘The Disappearing Media Auditor in the World’ by a management consulting company with a media audit function enabling it to become a media agency.

Problems in Japan

Unfortunately, the media audit is NOT a major process with popularity in Japan, which causes TARP to suffer a lack of knowledge & misunderstanding, leading advertisers to higher risks.
For example, there are some cases where the ‘NON-media specialists (immature media auditors) or NON-independent’ companies offer media audit services only to get media data from major / popular advertisers, or to just get some ‘experience’ in Japan. Advertisers are exposed to serious risks in this case from incorrect diagnoses & inappropriate direction, leaks of important information / data to immature outsiders, and loss of media spend investment efficiency.
Please use immediate and careful judgement, the above happens due to lack of correct information and understanding of what media audits should be.

Internet / Web / Digital Media

Of course, dealing with Internet /Web / digital media is one of the hottest & most important topics now.
Media spending on the Internet/ Web / digital media is on the rise at +10% compared with the previous year.
However, the Internet / Web / digital media has many problems especially in the Japanese market as follows:

  • Too many layers in digital media buying, unknown cost structure
    →There are media reps between agencies and publishers in Japan, creating one of the unique structural problems in Japan
  • Unusual media agency tasks (compared with traditional media)
  • Bot and Ad fraud
  • Agency overcharging (disclosed as ‘inappropriate invoicing & actual reporting’ problems)
  • Brand risks
  • Too many tools & tool vendors
  • Less transparency than the four mass media giants (TV, radio, newspapers & magazines)
  • Structural problem of Advertiser & Agency

Because these problems are impossible to solve by simply the introduction of tools or technologies, you should deeply / accurately understand the culture and structure of the media business & latest Internet / Web / digital media trends based on information from 3rd parties, NOT based on information from media agencies (which is subjective!).

Future Prospects for the Media Auditor

Therefore, the media auditor should deal with NOT ONLY traditional media like TV, Print (newspapers and magazines), Radio and OOH, but should also have enough capability to understand the Internet / Web / digital media, for current and future market needs.

What is SPI Doing Now and in the Future Considering the Current Status?

Considering the above status, SPI delivers media audits & media consulting services by strongly maintaining a neutral / objective / independent standpoint and by expanding / improving our media audit datapool and professionalism including Internet / Web / digital media perspectives.
SPI has established SPI Interactive to deliver digital solutions with specific knowledge / techniques including digital media auditing in Y2017; the new company has already handled approximately 30 Internet / Web / digital media audits at this point.

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Please contact us with questions or for more detailed information.

Shiro Kokue: Partner / Senior consultant
Ayumi Watanabe: Senior analyst
Ai Ono: Analyst
Aimi Kobayashi: Assistant analyst
Takahiro Doi: CEO of SPI Interactive

<contact>
E-Mail: spiindex@spi-consultants.net
Homepage: http://www.spi-consultants.com/en/

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