WFA webinar featuring Nick Manning of Ebiquity: focused on auditing in less mature advertising markets.

1. Media auditing in rapid growth markets
Webinar. 14th Feb 2013

2. Quick introductions…
Robert Dreblow Nick Manning
President, International

3. Questions raised across our membership

4. Which we have responded to…

5. Media auditing widely adopted with clear
preference for permanent appointment
Do you use a media auditor?
64%
27%
6%
3%
Yes, we permanently Yes, we occassionally No, but we have No, we do not (and
work with a media work with a media worked with one in the never have) worked
auditor(s) auditor(s) on a project past with a media auditor
basis
Source: WFA online member survey. September 2011. Base: 33. The list of WFA company members can be found at www.wfanet.org

6. Range of services fall within auditing
territory, with similar demand by region
What do you use media auditors for in your region(s)?
EMEA APAC US+LATAM
# responses # responses # responses
0 10 20 0 5 10 15 0 10 20
Analyse buying Analyse buying Analyse buying
Media inflation est. CPM benchmark Media inflation est.
CPM benchmark Media inflation est. CPM benchmark
Consult on pitches Consult on pitches Consult on pitches
Market insight Market insight Market insight
Competitive insight Financial audit Competitive insight
Financial audit Competitive insight Financial audit
General
General consultany General consultany
consultancy
Training Training Training
Source: WFA online member survey. September 2011. Base: 33. The list of WFA company members can be found at www.wfanet.org

7. But auditing much less established
outside Europe
Do you use a media auditor in…?
Nordics
Russia
UK
Germany
France
USA Turkey China
Japan
Spain
Italy
South
Korea
Mexico
India
Brazil
Do you use an Australia
auditor in…
South
Africa
Yes (% respondents)
No (% respondents)
Source: WFA online member survey. June 2012. Base: 29. The list of WFA company members can be found at www.wfanet.org

8. With a lower proportion of spend audited in
high growth markets (China, India, Brazil…)
What proportion of your media spend is audited?
86%
81% 80% 79% 78% 78% 78%
77% 77% 77% 76%
74% 74% 74%
69% 67%
64%
Resp 1 2 7 14 14 17 13 17 18 6 2 8 6 11 9 9 6
n.b. ranked on weighted average total proportion of media spend audited
Source: WFA online member survey. June 2012. Base: 29. The list of WFA company members can be found at www.wfanet.org

9. Drop-off in satisfaction rates outside Europe
How satisfied have you been with your auditors capability in your regions?
(Shows TV only)
Europe APAC LATAM Middle East & USA/Canada
Africa
Very satisfied Somewhat satisfied Neutral Dissatisfied Not used
Source: WFA online member survey. September 2011. Base: 33. The list of WFA company members can be found at www.wfanet.org

10. Lack of credibility and transparency
thought to be key barriers to growth
What are the main barriers to entry to effective auditing in your region?
APAC Europe LATAM Middle East & Africa USA/Canada
0 10 20 30 40
Lack of credible benchmarks
Lack of transparency
Established suppliers not ready
Lack of competitive client data
Pools are too small
Lack of reliable auditors
Lack of advertiser commitment
Lack of reliable metrics
Agency resistance
Lack of supplier experience
Media owner resistance
Limited internal resources
Source: WFA online member survey. September 2011. Base: 23. The list of WFA company members can be found at www.wfanet.org

11. Send us your questions

14. Independent marketing and media performance specialists
Financial media auditing and contract compliance
Reputation research measurement specialists
14

15. Our global footprint
Ebiquity Offices
Leading Independents
15

16. A range of techniques is needed
Availability in Emerging markets
Media Campaign
performance
Year on Year
Performance
Cost & Quality
Tracking
Pool Benchmarking
Financial Auditing
16

17. Media Campaign
performance
Independent
Process Coaching &
Campaign
Audit Consultancy
Reviews
Data sourced Independent feedback Install best practice
independently (where on client and agency briefing &
available). process. measurement
Track agreed cost & Identify issues which processes.
quality KPIs. can be resolved. Empower local teams
Challenge agency Put best practice to challenge their
thinking. processes in place agency.
17

18. Recommended for….
Markets where pool benchmarking data is
insufficient
Markets where there are problems with process
and/or media agency relationship
Markets where media targets aren’t clearly defined
18

19. Where is it available?
Independent Process Audit Coaching &
Campaign Consultancy
reviews
Brazil
China
Egypt
India
Indonesia
Mexico
Philippines
Poland
Russia
South Africa
South Korea
Turkey
19

20. Internal tracking and KPI setting
Year on Year Cost & Quality
Performance Tracking
•Track delivery vs. a fixed •Track cost delivery vs. a
benchmark fixed benchmark
•Can be previous year’s •Assess efficiency of
delivery or fixed guarantees campaign through
•Normalisation in measuring reach efficiency
accordance with specific •Quality performance
client / agency contracts tracked vs. a fixed
and processes benchmark
•Seasonality •Focus on improving vs.
•Quality benchmarks
•Target audiences
•Inflation
20

21. Recommended for….
Markets where pool benchmarking data is
insufficient
Markets where savings are needed
Media agency remuneration setting
Pitch KPI setting
21

22. Where is it available?
Year on Year Cost & quality
tracking/ Tracking vs.
guarantees
Tracking vs.
guarantees
Brazil
China
Egypt
India
Indonesia
Mexico
Philippines
Poland
Russia
South Africa
South Korea
Turkey
22

25. Cost & quality benchmarking
Driving buying efficiencies across your media investment
Pool Benchmarking
1 2
Cost Performance: Quality Scores:
Real transaction costs, Driven by campaign
sourced from a local Cost Benchmark Quality Analysis objectives, sourced
vs.
cost pool from independent
Cost Pool
data
Benchmark versus
clients in cost pool Benchmark against
tailored competitive
Like-for-like basis used panel set by market
for benchmarks by
each country’s trading Quality elements
dynamics weighted to match
client priorities
3
360
perspective
of Agency
performance
25

26. Recommended for….
Markets where pool benchmarking data is sufficient
Competitive benchmarking
Performance tracking
Media market insight
Media agency remuneration setting
26

27. Where is it available?
Pool
benchmarking
Brazil
China
Egypt
India
Indonesia
Mexico
Philippines
Poland
Russia
South Africa
South Korea
Turkey
27

28. Some local guidelines: LatAm
Brazil
• A difficult market to audit in the traditional manner
• Strong vested interests, so best conducted from outside Brazil using panel for quality
and discount benchmarking for pricing
Mexico
• Strong media owner pressure
• Pool and Panel benchmarking possible
• Pool benchmarking and year on year benchmarks available according to need
28

29. Some local guidelines: India
• Strong inflationary pressure: advertising expenditure up 17% CAGR over 5
years; scope for further growth: adex as % of GDP only 50% world average
• Channels multiplying, audience fragmentation
• Influence of cricket (IPL) helping drive strength of TV, but multi-platform
booming
• Cost & Quality benchmarking is possible via Spatial Access owing to strong
local and international client list
• But it’s very expensive owing to scale of market (up to 8m spots!); treat as
a region
• Only economical for big budgets, year on year tracking a lower cost option
29

30. Some local guidelines: China
• Highly fragmented, multi-tiered media market: a region, not a country
• Very opaque, hundreds of brokers, sub-contracting of media buying to
third parties: more about risk management
• Up to 50% of agency profitability estimated to be generated from media
cashflow
• Huge variables in buying costs (up to 500% on like-with-like basis)
• Much bonus inventory, AVBs rife, commissions throughout system
• Only significant pool auditor is China Media Consulting Group, who
specialise in ‘following the money’ to explain pricing; strong local as well
as international pool
• Scale makes full benchmarking expensive
30

31. An increasingly untransparent eco-system
Agency
Trading Desk
Media Buying
Brand-owner
Agency Group
Media Financial Media
Audit Audit? vendor
Right of audit now needs to cover the full transactional cycle
31

32. Financial Auditing
Recommended for….
Improving transparency throughout the value chain
Ensuring contract compliance
Rebate control
Available in all markets
32

33. To Summarise
33

34. Which techniques would we recommend
Media Year on year Cost & Pool Financial
Campaign Tracking/ Quality Benchmarking auditing
Guarantee
Performance tracking
tracking
Brazil
China
Egypt
India
Indonesia
Mexico
Philippines
Poland
Russia
South Africa
South Korea
Turkey
34

35. To summarise
• Media auditing in emerging markets requires a range of techniques
• The chosen technique should be calibrated to the status of the
maturity of the market
• Pool and Panel ‘gold standard’ benchmarking is not possible to WFA
standards in some markets, but bigger markets such as China and
India are now more robust
• Yearly improvement targeting available just about everywhere via
relevant systems
• A rigorous programme of measurement is possible everywhere
35

39. What’s next for WFA members?
• MEDIAFORUM
• 17th April, London (Nokia)
• 29th May, Shanghai (Coca-Cola)
• 12th September, Europe
• 7th November, NYC
• Q3: new media auditing peer
research for WFA members

40. Thank you!
Nick Manning
nick.manning@ebiquity.com
Robert Dreblow
r.dreblow@wfanet.org