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Financial Stewardship AuditDetermine accuracy and timeliness of
payments andexpenses between advertiser and agency.
Identifyingopportunities to improve process.
1
23
4
5 Contract AssessmentComparing agency contracts to PwCs leading
practicechecklist including assessment of any performance
relatedincentive schemes.
Agency Compensation AssessmentDetermine accuracy of agency
compensation,including any bonus/malus. Review staffingallocations
and changes over time.
Creative Production AuditDetermine accuracy and timeliness of
payments andexpenses. Identifying opportunities to
improveprocess.
Media Performance AssessmentValidate delivery and determine
compliance to buying
guidelines. Benchmark performance relative to fairshare and
competition.
AgencyCompensationAssessment
Media PerformanceAssessment
FinancialStewardship
Audit
CreativeProduction
Financial Audit
Media &AdvertisingAssurance
PwCs Media and Advertising Assurance Services
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Todays discussion
Your Agency Universe
R&C Industry Media Spend
Key Trends
Media & Advertising Spend- a hot topic for R&C Internal
Audit
Panel Discussion
4
April 2014R&C Internal Audit Roundtable: Media and
Advertising Risks for Internal Auditors
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Your Agency Universe
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April 2014R&C Internal Audit Roundtable: Media and
Advertising Risks for Internal Auditors
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The agency universe
Advertising- General Market
- Multi-Cultural Markets
Creative Production
Media Planning/Buying
- Traditional
- Internet and new media (digital)
- Social media
Direct Marketing
Promotions/Events Marketing
Sports Marketing
Public Relations
Brand/Marketing Consulting
Customer Relationship Management (CRM)
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April 2014R&C Internal Audit Roundtable: Media and
Advertising Risks for Internal Auditors
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Typical steps of the end to end media process
R&C Internal Audit Roundtable: Media and Advertising Risks
for Internal Auditors7
April 2014
Budget
P
lan
Buy
Pay
1. Initiateannualpreliminaryallocation
2. Determinemedia planningrates
3. Developcommunication
strategy
4. Developstrategic media
plan
5. Approveannual budget
6. Developdetailed mediabuy
7. Executepurchases
10. Resolve
discrepancies
8. Receive
invoices
9. Process
invoices
11. Performinitial mediareconciliation
12. Analyzemediaperformance
13. Conduct backend audit
14. Reallocateresources
Shared
Agency Led
Advertiser Led
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Retail & Consumer Industry Media Spend
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April 2014R&C Internal Audit Roundtable: Media and
Advertising Risks for Internal Auditors
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Retail & Consumer Industry Media Spend*
Significant spend
- Retail & Consumer industry measured media spend was
over $35 Billion in 2013
- Does not include below-the-line marketing spend
Creative production
Direct marketing
Public relations
Agency fees
Shift from traditional media to internet & new media
advertising
9
April 2014R&C Internal Audit Roundtable: Media and
Advertising Risks for Internal Auditors
Media Type2013 Total $(in 000s) * 2013%
Magazines 7,270,000 20%
Cable TV 6,330,000 18%
Network TV 5,240,000 15%
Newspapers 3,910,000 11%
Spot TV 2,700,000 8%
Internet Display 2,230,000 6%
Internet Search 2,090,000 6%
Syndication 1,390,000 4%
SLN TV 1,110,000 3%Local Radio Sum 1,040,000 3%
Outdoor 730,000 2%
National Spot Radio 430,000 1%
National Newspapers 420,000 1%
Network Radio 380,000 1%
Sunday Magazines 270,000 1%
B-to-B 190,000 1%
Local Magazines 80,000 0%
Hispanic Newspapers 80,000 0%Hispanic Magazines 30,000 0%
Grand Total 35,920,000 100%
*R&C industry media spend was pulled using industries that
fall within the retail & consumerspectrum including : retail,
department stores, food & beverages, liquor, beer & wine,
foods,apparel & accessories, cosmetics & beauty aids,
footwear, jewelry & watches, games & toys,and personal
hygiene & health. Source: Kantar
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Media & Advertising Spend-a hot topic for
R&C Internal Audit
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April 2014R&C Internal Audit Roundtable: Media and
Advertising Risks for Internal Auditors
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Accountability , Complexity and Transparency
Move toward marketing accountability:- Cost and ROI
Increase in media complexity:
- Outlets and intermediaries
Big agency consolidation:- Limited choice, sister companies
Rapidly evolving practices and technologies:
- Data visibility and management
Questions around financial transparency:- Discounts, rebates
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April 2014R&C Internal Audit Roundtable: Media and
Advertising Risks for Internal Auditors
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Benefits
Increased transparency
Improved agency relationships
Maintain competitiveness
Financial due diligence
Cost savings opportunities
Process improvements
Verify proof of performance and delivery
Compliance and contract assessments
Areas Typically Reviewed
General billing and compensation
Media services and agreements
Creative services and agreements
General agency operations and workflow
Media placement schedules and post-buy reports
Media buying guidelines
Agency Reviews Help Gain Control over Marketing Investment
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April 2014R&C Internal Audit Roundtable: Media and
Advertising Risks for Internal Auditors
Typical Questions Answered
Did the advertiser receive what they paid for? Did
advertisements actually run as planned and bought?
Has audience delivery been accurately calculated by the media
buyer and reported to the advertiser?
Does advertisers scope of work and agreed-upon labor hours for
Brand X or Project Y prove to agency labor reporting records?
Are fee reconciliations being performed?
Were production out-of-pocket costs billed in accordance with
contract guidelines?
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Panel Discussion
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April 2014R&C Internal Audit Roundtable: Media and
Advertising Risks for Internal Auditors
Moderator:
Jonathan Spira- PwC, Director, Media & Advertising Assurance
Services
Panel Members:
Susan Claremont- Weight Watchers, Vice President, Internal
Audit
Lynn Laskiewicz- Walgreens, Director, Strategic
Sourcing-Marketing
Jackie Weiner- PwC, Director, Media & Advertising Assurance
Services
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Thank you
Jonathan SpiraDirectorMedia & Advertising Assurance
ServicesPwC300 Madison Avenue
New York, NY [email protected]
Jacqueline WeinerDirectorMedia & Advertising Assurance
ServicesPwC300 Madison Avenue
New York, NY [email protected]
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