For decades we’ve been baffled with one question as it relates to the U.S. National TV media buying industry.  

Why spend millions of dollars annually for media buying platforms, only to have to manage National TV buys outside of them?

We’ve been talking about the risks and inefficiencies associated with this industry shortcoming with Clients and their agencies for many years, and addressed in this blog post from 2015.

Despite all of this, the current state of managing National TV buys in the U.S. still requires three disparate data sets to be reconciled:  deal documentation, invoices and vendor posts. Given that these don’t reside in one media buying software platform, the process is labor intensive and error prone.

Two of the three data sets rely on paper documents, despite the digital and big data age in which we live and operate in other channels of the marketing mix. With such a reliance on paper (or PDFs of paper), document management becomes a very important process at your agency to mitigate risk in the National TV supply chain.  An assessment of these procedures is a part of the MMi accountability and transparency insights we provide our clients in addition to providing the impressions and value still due to the advertiser.  

A true reconciliation of your National TV investment examines and links the following source data elements.  

1.    Deal Documentation. This is sometimes called a Network Order Letter, and sometimes the format is as simple as an e-mail.  Sometimes they are written by the buyer, and sometimes by the seller.  But make no mistake, this is the Contract between Buyer and Seller and should include all of the terms of the Deal.  Sure, there are dollars and impressions and the related CPM.  However, there should also be the demo, the ratings currency (program or commercial minute ratings,delayed (DVR) viewing, if any), the guarantee structure (particularly for Scatter or multiple packages that may be guaranteed as a whole), cancellation options and any buying guidelines that require a credit for violation, and a number of other negotiable points.  We prefer to see formal Order Letter documents memorializing all of these pertinent deal points (and not a string of emails back and forth).  This is the contract, or the closest thing that there is to one in this ecosystem. Best Practices is to issue updated Order Letters if buys are changed and to maintain current and fully executed (agreed upon) documents in a centralized agency file.

2.    Invoices. This is the affidavit record of the commercials that actually ran, and represents what the advertiser was invoiced and is being asked to pay.  (The audience associated with each of these units is reconciled later.)  Agencies manage this data in their buying software, and MMi accepts an electronic export of this data to expedite the media audit process.  Best Practice is to manage all commercials at the occurrence-level in an accepted industry software platform.  Each unit is an individual line item with fields for all relevant associated data specific to that unit (date, time,length, cost, etc.).  All vendor invoices should be reconciled and cleared for payment within 60-90 days after end of month of service (30 days for Network TV).

3.   Vendor Posts.  These documents represent the final count-of-record for audience measurement in National TV. And they are produced by the sellers, according to their desired methodology – and on their timelines.  In the case of Cable networks, a third party data processing company called Management Science Associates, or MSA, is hired by the sellers to generate proof of performance.  The MSAs are used because audience cannot be replicated independently by the buyers given the limitations with their media buying platform, specifically due to the variations on seller-mandated audience measurement calculation methodologies.  Each buyer posts a little differently, and buying platforms cannot easily deal with these nuances.  So in most cases the post your agency produces in its buying platform does not match the post of record generated by the seller or by MSA.  Best Practice is to require all Vendor Posts and MSAs be provided to the agency within 60-90 days after end of broadcast quarter.  

You don’t have to be an Internal Auditor or a Systems Analyst to see the inefficiency and room for error in this National TV supply chain, even before consideration of agency staff turnover and inconsistent record-keeping procedures.  Order letters are not electronic, are not generated consistently from one agency to the next (and are sometimes written by sellers), and often lack certain deal points or are not updated to reflect changes.  Invoices are generally produced electronically, however reconciliation processes are often slow and less than rigorous(with agencies “force matching” buy lines that technically do not clear in their buying platforms).  And posts are generated by sellers and MSA, weeks or months after the fact, using methodology the agencies can’t easily replicate for themselves in their buying platform.

MMi has created a software platform to capture the collection of these data points and provide consistent and accurate calculations over the life of these transactions, which is often several years.  However, we look forward to the day that National TV buyers take back control of the counts-of-record methodologies and timing that is in the best interest of the Advertisers for the most timely and accurate reporting possible.

 

Using the media buying software to actually manage deal guarantees and vendor posts (in addition to invoices) should be the goal of the U.S. National TV media buying industry, because it’s in advertisers’ best interests.

 

 

To learn more about how MMi helps advertisers and agencies bridge the information gap, improve automation and linkage through the media supply chain, and drive ROI, please contact us.

Image credit: © Paul Prescott | Dreamstime.com

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