• by Joe Mandese  @mp_joemandese, August 3, 2005

Demonstrating the influence a little oversight can have on the quality of media buys, big agencies and networks that have been monitored by media auditing services are beginning to change the way they conduct business. Significantly, the changes are going well beyond rate negotiations to include the quality of advertising schedules, as well as the environment that the TV ads appear in. The changes have been slow, but are beginning to pick up steam, says Mike Lotito, a former top agency media chief, who formed Media IQ two years ago to develop a new kind of media auditing practice in the U.S., one that focuses not simply on compliance and costs, but on the integrity of media buys.

The bet paid off, coinciding with a broader trend toward corporate accountability for all areas of marketing, including media planning and buying. Not surprisingly, the changes have been taking place among some of the biggest advertisers and agencies. While Media IQ does not disclose the clients it works for, it is known to work for biggies like American Express and Sears Roebuck & Co., two advertisers that have made marked shifts in their media plans over the past several years, often at the expense of television.

However, Lotito sees some of the more recent changes as being net positives for TV. As the agencies Media IQ works with begin going back to TV networks armed with data on the quality of their buys, he says those marketers are getting better deals, and that ultimately is resulting in a greater "ROI" - return on investment - for television in their mix.

"We know it's happening, because our scores are improving," says Lotito, referring to Media IQ's system for scoring national TV outlets based on an array of qualitative factors that go beyond CPMs and GRPs to include the amount of clutter they air during commercial breaks, as well as the positions they schedule various clients' ads in during those commercial breaks. The scoring system is premised on two fundamental beliefs in TV ad planning: 1) That clutter hurts advertising recall and effectiveness; and 2) That the first commercial airing in a break is more effective than others.

While agencies have historically monitored those elements on their own, they have done so sporadically. Media IQ does it rigorously and issues what amount to monthly report cards on each network that can be used by advertisers and agencies to negotiate better terms.

For example, a Media IQ review of TNS Media Intelligence/CMR ad tracking data from the 2003-04 TV system showed marked disparities in the way some national TV networks treat their clients in terms of ad rotations. The data revealed that CBS had the best overall environment, running network promos in only 16 percent of its commercial inventory during breaks, vs. cable networks like WB and AMC, which ran promos in 29 percent and 36 percent of their inventory, respectively.

Based on that kind of data, Lotito says both agencies and networks are changing business practices. The ad sales chief of a major cable network is already using the data internally to win back inventory for advertising sales, while a major media shop recently sent letters to all of its national TV suppliers informing them that they now need to adhere to the criteria being monitored by Media IQ, because the agency would hold them accountable in their negotiations.

"The agencies are being asked to live up to a higher bar, so they're doing the only smart thing you can do. They're asking the networks to be accountable to the same standards they are," explains Lotito, noting that the big difference is the availability of consistent, ongoing "benchmarks" that agencies can use to compare their performance - and the performance of their clients - among specific networks.