Step could be tremendous for discipline gaining momentum in U.S.
Procter & Gamble has hired an outside media-auditing firm in what a representative called a "collaborative test" of the process with its broadcast-buying shop, Publicis Groupe's MediaVest in New York.
The $2 billion-plus advertiser tapped Hawk Media, San Francisco, following a review last month of four undisclosed audit firms, sources said. Hawk will meet with MediaVest in early June to begin analyzing whether P&G's media buys deliver the audience called for in its plan.
The assignment is said to be limited so far; one source described it as "a test" to determine if P&G will expand the scope.
P&G rep Gretchen Muchnick confirmed the decision to experiment with independent auditing. "For as long as Procter & Gamble and MediaVest have been partners, we have continually looked for ways to improve the process," she said, adding that the project is "still in the very early stages."
Muchnick declined to discuss details of the review, including its participants and outcome.
The packaged-goods giant, like most clients, has conducted internal audits in the past, but this is the first time P&G has gone outside to track the effectiveness and efficiencies of its media buys.
MediaVest handles P&G's $1.4 billion U.S. broadcast-buying business, while Publicis sister shop Starcom in Chicago handles the $550 million print-buying assignment.
P&G's arrival on the independent auditing scene "could be a tremendous thing" for a discipline that is beginning to gather momentum in the U.S., a source said.
Independent media auditing, which has grown slowly but steadily in the U.S. ad market, may be getting a major credibility boost from P&G. "If Procter & Gamble moves in, that changes the whole perspective," said another auditing executive. "Packaged goods has been the hardest category [for independent audit firms] to crack."
Compared to Europe and other markets abroad, where about three-quarters of all media buys are audited, the discipline has only a foothold in America. Audit firm executives estimated that about $2 billion of the $50 billion spent on advertising in the U.S. is audited, and about half of that is done on an assignment basis only. Most of the independent auditing done to date in this market has been in the spot broad-cast area.
Burger King, KFC, Pizza Hut and others have engaged outside audit firms for years. However, the trend has accelerated in the past year. In 2002, Hyundai launched a review of media-audit firms for the $400 million consolidated Hyundai/Kia media account handled by Aegis Group's Carat in New York [Adweek, May 20, 2002]. That review was won by MMI in St. Louis.
New audit firms are launching to handle the increased business. Former Carat executive Jim Surmanek launched Denver-based MediaAnalysisPlus in 2001, and last month, former Initiative Media president and chief operating officer Mike Lotito opened a New York consultancy called M-IQ.
Contenders in the search were first contacted by letter from P&G's procurement division in March, asking if they would be interested in participating in a review. P&G's review panel included representatives from the company's purchasing, market- ing and finance departments, as well as MediaVest.
The RFP included questions about methodologies and verification processes, and asked how firms would "test the entire proposition of independent auditing," said one executive.
"It was so open-ended," said another source. "[P&G basically asked], 'You know who we are. What would you do?' "
Although media audits sometimes result in reviews of the buying service, they can also have the opposite effect. "It's about audience delivery, about getting what the plan said the client was getting," concluded one executive. "The real value of an audit is to improve the agency relationship."