Always-On Contract Compliance Audits: Quick course corrections to keep budgets on track

Always-on marketing. Real-time analytics. 24×7 campaign management. The pace of marketing life is getting faster. Business practices, information, roles and people all seem to have a very short use-by date: the industry is constantly shape-shifting. Our Always-On Audits provide quick, efficient course corrections to keep budgets and contractual commitments on track.

Our ‘standard’ media and marketing contract compliance audits have become annual fixtures for many marketing and procurement teams working on global brands. The audits deliver an authoritative look-back, typically at spend and business practices over the last budget period. Errant ‘pots’ and misallocated funds are returned to where they belong, contract terms are modified or reinforced as necessary, and business practices refined to build on the learnings. These ex post facto audits are powerful and effective.

Over recent years, however, we’ve become aware that clients in today’s fast-moving marketing scenarios often want the discover-correct-learn cycle to iterate a lot faster. Waiting till mid-2021 to find out about how things went in 2020 can be a bit behind the curve; clients would often rather see contractual anomalies discovered, corrected and tuned virtually on the fly, and the business lessons swiftly implemented to improve this year’s result, not just next year’s.

What can we do better — starting tomorrow?

Always-On Audits move closer to the ideal of a set of contract compliance ‘gauges’ built right into the client’s marketing dashboard. Your grasp of the inner workings of the client-agency relationship moves from a periodic glance in the rear-view mirror to a continuous rolling review mechanism.

Here are some indicators you can expect to see:

• Financial compliance: 
In the hustle and bustle of day-to-day interactions, the flows of cash between client, agency and the agency’s suppliers can become a little blurred. It’s important to have clarity: for example, to identify promptly any unspent funds allocated to completed projects so that the amounts in question are put back to work in the current financial period, rather than being left as a happy, but unexpected, surprise next year.
• Process compliance: Verifying that agreed operational processes are followed as specified in the contract is a key and timely win from Always-On Audits. Any difficulties with processes — handling of budget, invoicing, approvals — can be identified and fixed before they start to pile up in one big retrospective tangle. Very often lessons are forgotten if they’re invisible or too hard to untangle: timeliness is everything.

In practice, one of the biggest wins of an Always-On Audit arrangement is protecting your brand against knowledge loss, preserving the ability to learn from mistakes, and ensuring that important initiatives are followed through rather than simply being allowed to fizzle out as non-starters.

In an industry with a scarily high annual staff turnover rate (the IPA reckons it’s around 28–30%, with an average tenure of ad agency personnel of about three years), a lag of 12–18 months between a compliance anomaly and its discovery can mean that many of the key protagonists and knowledge-holders — on both sides of the table — may simply no longer be around. The more continuous, real-time nature of the Always-On Audit means that lurking compliance obstacles are spotted quickly and steered around while everyone involved is still in the game.

And perhaps most encouraging of all: the short, quick, light-touch nature of Always-On Audits means that the time burden of the audit process is surprisingly modest for both client and agency. With the right info-sharing protocols in place, we often find we scarcely need to go a-knocking on the agency’s door… we let the reports and the accounting records come to us. That leaves busy agency staff happy — and you feeling comfortable that your marketing agency’s contract compliance is nicely on track.