The Trouble with Pools
The trouble with media auditing pools is that when they get too deep, you run the risk of drowning.
Produced in collaboration with RAUS Global and AMI+ Partners
The best mantra in media circles is to Ensure you get what you paid for, and clearly defined terms describing what constitutes value is the key to verification. Value metrics may involve a number of benchmark definitions. Some may include a reference to a pool price, although, in recent times, the reference is most likely to add historical performance references.
Consider the potential for misunderstanding when media value swaps and Inventory Media are introduced into the equation. It becomes clear that simply surpassing a pool or any pool reference can, at best, only be a partial benchmark.
Fact #1: The largest media market, the USA, is so precise that a media audit reflects that market precision. Our work is focused on measuring delivery against the contractual agreements contained in the MSAs and the Upfront contracts. This does not require any pooling mechanism.
Fact #2: In most contemporary agency contracts, value guarantees are based on a clearly defined price point, generally historic client-specific inventory pricing. Again, though originating from a different pricing point (the client’s own inventory), this approach is exact. Our teams are generally required to interpret the delivered and verified value and apply it to a contractual (Client/Agency) context.
Delivery #1: In the USA, Fuel Media & Marketing’s partner AMI does not require a pool. The value metrics that matter are contained within the vendor contractual agreements. Pooling simply does not measure exactly what you supposedly paid for.
Delivery #2 In most contexts, benchmarks based on actual advertiser inventory are preferred. For instance, metrics such as ‘cost per thousand impressions’ or ‘return on ad spend’ are gaining popularity. This has happened as advertisers have increasingly become frustrated that their campaigns seem to beat pool benchmarks more often than not. Agencies will always put the best case forward to modify pool output due to buying conditions, diluting the power of a pool.
Historic agreements might reference tracking adjustments governed by pools or agreed inflation/deflation modifiers. Both methodologies have a part to play; however, consider the scenario of a multimedia or multi-territory mix of audits. The Media Value Swap, whereby performance across channels or even markets is aggregated into one overall value delivery, losing rigour and the confidence of local marketers. It soon becomes the ‘Get out of Jail’ card, allowing a delivery price to beat the pool.
The crux is that this is NOT the value metric the client agreed to. They need to receive precisely what they paid for. That problem can multiply itself when multi-market international agreements are susceptible to cross-territory media value swaps; poor performance in Italy could, for example, be cancelled out by a stellar value delivery in France. This is different from the value metric the client agreed to in Italy, even though Paris may be delighted.
We are getting deep into the weeds of media audit structure. The desire must be to encourage an equitable relationship where both the advertiser and agency benefit.
Trust is at the bedrock of that relationship, one where each party has faith in the value metrics agreed upon. These can not be open to interpretation based on an agency’s need to find extra value.
In 2024, a business relationship that involves allocating one of the most significant corporate expenditure items, media space, value is critical. The precision outlined above should now persuade the market to approach value metrics differently.
Metrics that take into account price pressures, inflation, booking deadlines, and inventory media minimise potential distractions that can call into question the actual contextual place of media value swaps and media inventory purchases, with the natural disruption in the stability of pools.
So back to where we started: “Make sure you get what you paid for.”
The best way is to agree on fixed reference points and how these should be normalised when the benchmarking process takes place.
Fuel Media & Marketing suggests advertisers and their agencies consider why pools may not always be the right approach
Trust is potentially undermined
The media audit itself can lose its power as interpretation becomes a joust.
Advertiser/Agency Relationships are strained and potentially jeopardised.
Fuel Media and Marketing is a leading specialist communications consulting company. Our teams advise clients in the field of media communications. To find out more on how Fuel can help, contact Oli on +44(0) 7534 129 097 or email [email protected].
