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The Running Tab

Behind the scenes, there's a battle between firms that verify that commercials air as they were scheduled 5/09/2004 08:00:00 PM Eastern

For all the sophistication of modern media, at some point, advertisers and agencies still want answers to three basic questions. Did my ad run? Did it run on time? Did the right one run?

The Commercial Cops
Verance and Audio Audit verify that spots media buyers bought actually ran. Here's a brief comparison of the two services
Verance Audio Audit
Source: B&C research
Number of markets served Top 100 Top 75
National cable networks 87 37
Local cable commercials Just starting Not yet
Who pays for monitoring? Network running ad Advertiser/agency
Test results Next day Next day

Answering those questions has gotten harder as cable has proliferated. Nearly every major media agency is in the process of testing or developing a way to close the gap between the promise of getting an ad on air for a client and the actual proof that the task was accomplished.

How often are things botched? Estimates range from 10% to 20%. Those are costly mistakes that sometimes can't be easily corrected with make-goods, especially when a commercial for a movie or a big retail sale doesn't run. If your movie, opening Friday, needed a big kickoff from advertising on a Thursday edition of off-net Seinfeld
and the commercial is omitted, getting three make-goods from TBS on next week's showing of the film U.S. Marshals
won't help you much.

Several media auditors and verification providers have been trying to cure the problem. But while they've previously been concentrating their sales pitches at media agencies, many are now turning to the networks themselves, as the media outlets seek to improve their business models and bottom lines.

Among the verification providers, the two best-known are AudioAudit and Verance Corp. For the past year, Interpublic Group's media shop Universal-McCann has been testing the two systems. Also in the past year, Publicis Groupe's MediaVest and Starcom and Omnicom's OMD and PHD signed up for software marketer AudioAudit's AdVantage Technology Platform.

Aegis Group's Carat USA expects to decide on a broadcast-verification provider by the fall and is currently examining the various offerings of several companies.

"With clients and agencies having to contend with paying double-digit rate increases for ever-decreasing rating levels, clients are demanding that their dollars work better and smarter," says Billie Gold, associate director, programming services, for Aegis Group's Carat USA. "Agencies are being asked to make absolutely sure that every dollar is spent to produce greater value with less waste and, more important, to make sure that they are getting what they paid for."

With billions of dollars placed in electronic media each year, accountability is fast becoming a critical element for advertisers and their agencies to consider, notes Greg Smith, executive vice president and chief information officer at Universal McCann. "It's a complex problem to solve," he explains. "That's why it's taken so many years. The good news is, we're heading in the right direction, as broadcast verification is absolutely required. One of the fundamental pieces of the puzzle for a client is the waiting to find out if the ad ran or not and, if not, how quickly I can receive a make-good."

Verance and AudioAudit have a number of attributes in common. Both are Internet-based and use Donovan Data Systems back-office media-transaction software, which is widely accepted in the industry. Both allow buyers to track broadcast schedules within 24 hours of spots' airing.

Verance is just starting to be able to measure local markets. AudioAudit doesn't, yet, but does offer a series of analytic tools that Verance doesn't.

The drive to innovate and offer the most comprehensive information has also led AudioAudit and Verance to explore deals with Nielsen Media Research. AudioAudit jumped first, in February; its Nielsen-powered data is hitting the market now.

"We continually go back and look for ideas to streamline the reporting process," says Rich Alcott, executive vice president for marketing at AudioAudit. "Not only can we tell you what happened in terms of your ad running, but we can tell you how many people saw the ad based on Nielsen estimates."

Verance won't be able to make a Nielsen deal until year end, say agency sources evaluating both services.

The most distinct difference between Verance and AudioAudit rests on their respective business models. AudioAudit's pay structure is based on charging clients a percentage of total annual ad dollars spent by a client that uses its services. Verance's approach, which several media buyers and TV networks don't like, is to charge networks for the work it does on behalf of media agencies and their clients.

Because of that approach, notes one media buyer whose agency is considering using a verification system, Verance can't clear up discrepancies before they air unless networks freely agree to supply log information ahead of time.

But networks resist being asked to pay for a service that, for one thing, they did not seek out. "If it came down to a situation where [the networks] would have to pay for media auditing," says one ad-sales executive for a major network, "the cost would eventually be passed on to media agencies and their clients."

AudioAudit and Verance aren't the only tracking services. Rival companies are trying other models to make media-buying more intelligent and reliable. Media IQ, for example, monitors national and cable broadcast and analyzes the performance mix. In other words, it tells clients what other kinds of commercial positions were available elsewhere and what kinds of commercial ran on competing outlets at the same time.

"We don't seek to advise clients on how effective their media strategy is," says Media IQ CEO Mike Lotito. "We measure the mix that was originally bought, compare that to the mix that actually runs, and simply put a value on the difference between the two."

Verance and AudioAudit don't do that, and Lotito's not impressed by the their models. "I'm not sure that the traditional auditing business model is going to survive," he adds. "I'm not sure you gain a lot from double-checking [traffic logs] because, truth be told, there's only a small amount of discrepancies that a company can build a business on."

Verance chief executive Steve Saslow dismisses criticism of his company's business model, noting the panoply of other analytical tools and services it plans to roll out. It is the seller, he believes, that should be held accountable for the media buys. After all, look how much money is being spent.

"Ultimately, the benefit is to the broadcaster as well as to the buyer," Saslow says. "The cost we charge is so incidental. We free up a lot of time and work for them in ironing out discrepancies."


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