EMM in the News

Scrutiny goes global  

by Mark Tungate, August 2005

Media auditors are extending their reach internationally. Should agencies be worried?

Many people working in the media industry around the world still have only a hazy understanding of the work of the media auditor. But now the sector is expanding its global reach, that situation is about to change.

Media auditors occupy the middle ground between advertiser and media agency. They can act as matchmakers between advertisers and agencies, and ensure that clients are getting enough media “bang” for their bucks. Increasingly, as the media landscape becomes more complex and difficult to quantify, they are broadening their offering to become strategists and consultants.

Historically, media auditing began in the United Kingdom, which was the first market to witness the rise of the independent media buyer. These new media independents argued that they could negotiate better rates on media space, and deliver more efficient media plans. But somebody had to verify the authenticity of their claims: hence the media auditors.

Today, after several years of consolidation, the media auditing sector comes down to four main players: Media Audits, Billets, Fairbrother Lenz Eley and EMM (Effective Media Management).

Compared to the rest of the advertising industry, media auditing is still in its infancy. While between 60% and 65% of all media bought in the UK is audited, the figure is much lower elsewhere. “It’s around 20% in European markets like Germany, France and the Netherlands, but in the United States and Japan – the two biggest advertising markets in the world – it’s only about 2%,” says Stephen White, founder of EMM.

Add to this the developing markets of Russia, Brazil, China and the rest of Asia, and it’s clear that media auditors are looking at a major opportunity.

Their international expansion took a major step forward with the acquisition in August of Billets by Thomson Intermedia. Thomson has developed technology that can show advertisers how much they are spending on media compared to their competitors and, in some cases, how effective their advertising has been. For instance, the company has access to supermarket chain Tesco’s loyalty card data, which can tell it what items customers are buying and how that relates to advertising. It doesn’t take a genius to work out the synergies between Thomson and Billets.

Tony Squires, UK managing director of Billets, says: “One of the things we’ve always been good at is plowing our money back into research, but obviously there’s a limit to the amount we can do that within our own profits. Thomson gives us access to resources and capital that will enable us to continue our development.”

He confirms that international expansion is high on the list. Both EMM and Billets have been pushing hard in the United States, which is seen as the market with the biggest short term potential. Tony Squires comments: “The States is obviously a massive opportunity because of the size of the advertisers.” There is also a technology gap. “The UK market has always been very data driven: we’ve got second-by-second BARB data, for example, while [the US] still doesn’t have minute-by-minute data. I think advertisers there are going to be surprised how much money we can save them.”

Does this worry the agencies? Not according to EMM’s Stephen White, who has been warmly welcomed during his trips to the US. He explains that in the wake of the Sabanes Oxley Act, passed in 2002 to toughen up accounting and reporting procedures, both agencies and clients are looking for new ways to justify their media expenditure. “There is a general move towards greater accountability, openness and transparency,” he says. “A big advertiser can no longer say: ‘We don’t buy media – that’s up to our agency.’ So there’s definitely a role for auditing.”

Having said that, the evolving media world means that auditors can’t afford to promote themselves as “number crunchers”. As media become unwired and traditional TV starts to look like a thing of the past, they will provide more strategic analysis of where clients should spend their money. It used to be about saving cash – now it’s about spending it better.