Audit continues to be considered a taboo, says Spatial Access's CEO

Advertisers and agencies do have a lot of data but in silos. This data is not talking to each other

Indian advertisers together spent over Rs 60,000 crore (Pitch Madison Advertising Report 2019) on different media last year. What are the key audit and transparency issues the industry needs to address?

At 12 to 14 per cent per annum, India is one of the fastest growing advertising markets. Over a period of time, television has become the biggest media, print is becoming smaller, and digital media is growing. Interestingly, in terms of media spends, digital as a platform is becoming bigger than outdoor, radio and cinema put together. Again, Rs 60,000 crore is a lot of money in the advertising market. With the emergence and growth of multiple media platforms, the traditional structure of two or three key players including a client, an agency involved in closing a deal is changing.

 
Today money passes through too many hands. Multiple players are involved in a deal. The changing media landscape calls for an additional level of checks and balances to make sure that advertiser money is well spent and diligently documented. From the audit and transparency perspective, there are broadly two things that need to be checked. First, the advertising money is being spent at the right place (right media platform) and at the right price. Increasingly, clients (advertisers) need an independent pair of eyes to tell them whether they should be present on say ZEE TV instead of Star Plus and whether they bought IPL at the right price. 

 

So why is media audit still a taboo?

The truth is audit is considered a taboo. The very word and the exercise itself continue to raise eyebrows. However, slowly, the advertisers’ perspective is changing. More and more brands are coming forward to seek external advisory to ensure that their advertising money is well-spent and tracked. For firms like ours, while carrying out media audits, the objective is not to find mistakes but to ensure there are no mistakes.
 
How has the media audit and advisory space evolved over the past five years or so?

While we started offering audit services about 15 years ago, audit as an independent function-business is a fairly nascent industry. Until four years ago, we were among a handful of companies offering independent audit services. In the last few years, we have seen a number of smaller players enter the space. The emergence and fast growth of digital media and the lack of transparency in tracking advertising spends and the effectiveness of digital media have led to the rise of smaller, independent firms specialising in audit. 

 
Given the growing size of the audit industry, big consultancy firms like PwC, Deloitte and KPMG, which have been traditionally known for carrying out statutory audits, too have started offering media audit services. The entry of smaller players in the market is going to expand the scope of offerings in the audit industry. Look at digital media. On an average, there are seven players involved in closing a deal. A lot of studies say that 50 per cent of money spent on digital goes to middlemen. At one level, while the advertising spends on digital are growing, the need for audit to ensure that the money is well-spent is going to increase too. All this augurs well for the audit industry.

 
Are smaller independent audit companies equipped to leverage technology? Because technology is make or break in this business...
 
Media or marketing is one of the few sectors and functions where a fast moving consumer goods company like Hindustan Unilever knows what kind of money and on which media a competitor like Procter and Gamble is spending. All this is possible because there are agencies and tools that track advertising spends and identify programmes and properties on which money is being spent. Competitors can even track the frequency of advertisements appearing on traditional media like television, print and radio. 

 
With so much data at the industry’s disposal, we should have been far more technology savvy but we are not. Even today, a huge amount of our work is done with the help of excel sheets. A lot of data is captured, the viewership, media spends and sales numbers are out there. But they are available in silos. This data is not talking to each other. Only a few big companies have what you call a single window view to see, compare and analyse this data which is available at one place at the click of a button.
 

So what is the way ahead?

Unfortunately, smaller companies continue to be oblivious of the advantages that digital technology has to offer both at the client and at the agency end. The challenges notwithstanding, things are changing slowly.