3 Reasons Why Marketing Accountability Matters

accountabilityAs 2015 has come to a close, many of us who are involved in the marketing and advertising industry will most certainly reflect on some of the challenges faced and lessons learned during the prior year. Rightly so, as future success is often based upon the knowledge gleaned from reviewing past experiences. 

We work in an industry that is dynamic and exciting and yes, at times, trying. The dizzying array of issues which industry practitioners deal with on a daily basis are not for the faint of heart; big data, ad technology, media fragmentation, changes in consumer media consumption behavior, industry consolidation, talent procurement and retention and a myriad of financial oversight challenges ranging from ad agency compensation to optimizing an advertiser’s return-on-marketing-investment (ROMI). 

One of the highlights from this past year is that a significant spotlight was cast upon a handful of seminal issues that have a direct and meaningful impact on the industry. These include conversations on improving transparency, mitigating the risk associated with fraudulent activity, particularly in digital media, and the need to strengthen client/ agency relationships. 

As importantly, we believe that a key takeaway from an advertiser’s perspective in 2015 is that accountability matters, perhaps more now than at any point in the recent past. There are three reasons why we believe that it is important for client organization’s to implement marketing accountability measures in the coming year: 

  1. Marketing expenditures represent one of an organization’s largest SG&A expense line times. As such the dollars spent in this area need to be closely monitored to insure that they are allocated and stewarded in an effective manner.
  2. Optimizing ROMI is the primary responsibility of marketers and their agency partners. This has never been truer than it is today given that CEO’s, CFO’s, CPO’s and Internal Audit are more focused on enterprise wide accountability initiatives than ever before. Further, many of these stakeholders view marketing as an expense to be managed tightly on a line-item basis, rather than an investment.
  3. Client marketing departments are the first and last line of defense when it comes to protecting an advertiser’s fiduciary interests. Gone are the days when ad agencies served as principal-agent for their clients. Ad agencies, ad tech firms, trading desks, publishers and fraudsters are all in competition to increase their respective share-of-wallet, often at an advertiser’s expense. As such, it is imperative that CMO’s work with their C-Suite peers to put in place the appropriate financial management processes and safeguards to protect the dollars entrusted to them. 

Ironically, in spite of these truisms, most advertisers have yet to implement formal accountability initiatives inclusive of agency contract compliance reviews, financial management audits or performance assessment programs to protect their marketing investments and to boost ROMI. 

While the reasons are many and varied, they are immaterial in the context of the current state. The reality is that client organizations which fail to embrace marketing accountability initiatives will be at risk when it comes to insuring that their hard earned budgets are spent in an appropriate and effective manner. In the words of Noreena Hertz, the noted English academic, economist and author: 

Transparency, accountability and sustainability have become the slogans of the market leaders.” 

There are many within the industry, including both client-side marketers and agency executives, who would argue that the move to improve advertiser controls takes time away from the business of creating and executing ad campaigns. 

Quite the contrary, in our experience, we have seen the implementation of accountability initiatives within the marketing area actually improve work flow, project briefing and approval processes; enhance client/ agency alignment, boost clarity around roles and responsibilities, provide rationale to upgrade marketing ops and clearly establish the expectations of both stakeholder groups. In the end, this can improve efficiencies, freeing up time for client facing activities and can help solidify the client/ agency relationship, all while enhancing transparency and controls. 

The primary reason for this is that accountability initiatives are predicated on enhanced levels of communications between clients and their agency partners and they ultimately drive understanding and trusts among C-Suite personnel at the advertiser in their agency partners. 

It is for these reasons that we believe that marketing accountability is a practice whose time has come. The stakes are too high for advertisers not to implement improved controls in 2016. Further, we know from experience that what is inspected is respected and respect is not a bad foundation on which to base a relationship. 

Interested in learning more about launching a marketing accountability program? Contact Cliff Campeau, Principal at Advertising Audit & Risk Management at ccampeau@aarmusa.com for a complimentary consultation on the topic.

Author Cliff Campeau

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