Commentary

Simple, Neat, and Wrong

by October 27, 2006

Q4 is upon us. I love Q4 because the NFL makes it perfectly acceptable to sit around every Sunday and enjoy the view from my couch with a few brewskis to help pass the time. When I get to work on Monday, though, a stack of discrepant invoices is there too, right where I left them on Friday afternoon.

In interactive advertising, it is unusual for media planners and buyers not to have at least a half dozen publisher invoices that need to be reconciled for payment. There are many reasons for this, not the least of which is that reconciliation is low priority and low fun for most folks. But the real reasons are more important and more correctable than one would think.

Agency side third-party tracking and publisher side delivery tracking are almost never equal. This results in publisher invoices not matching what an agency says it has delivered and what the agency has reported to the client. These discrepancies are rampant despite the so-called definition of an impression. Various performance pricing models also suffer these inaccuracies, including cost-per-click in search engine marketing and cost-per-acquisition measured by site pixels from vendors vs. third-party adservers.

Standardization of naming conventions at any point in the interactive workflow is virtually nonexistent. What an agency calls a "skyscraper" may be called a "Right Side Rectangle" by an ad sales rep. The billing system at the site may call it a "160x600" on an invoice. So when an invoice comes in from a site, it takes someone who knows the campaign inside and out to decipher what an invoice represents, so it can be associated with the correct line items and approved for payment.

This leads us to the next link in the chain: publisher invoicing systems. And I call them "systems" loosely, as the term implies functionality and organization. An agency with more than one client can receive a monthly invoice with a dozen line items, described in some secret code, with placements for campaigns that may be from a few clients. The secret code is referenced above as a problem--but to have more than one client on an invoice? (I'm the equivalent of speechless but since its print, I guess I just pause and keep writing.) How can an agency pay an invoice with multiple client billings on it--and then be able to report back accurately and confidentially to each client?

All of these billing issues can rack up to be serious problems because they represent real money. As agents of our clients, we are tasked with being responsible for the budgets they assign to our campaigns. That may seem obvious--but in our hustle-bustle world of interactive media planning, this element of the business sinks last on the to-do list. When we finally get to it, the can of worms may now be a den of pythons.

The industry is trying to make things better from a billing and payment perspective. Awareness of the problems is high, but finding a solution that works for all parties is unlikely. We must all do our parts from where we sit to improve fiscal responsibility. That means reconciling invoices in a timely fashion. It also means sending invoices that make at least some connection to the media that ran.

H. L. Mencken said, "For every complex problem, there is a solution that is simple, neat, and wrong." One out of three isn't going to cut it in this business. Let's work together to make this part of our business--simple, neat, and right!

What do you think can be done to solve the problem? Share your stories of billing woe on the Online Spin Blog.

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