BONUS AUDIT

Media Auditors helps a mass consumer goods advertiser to identify that the bonuses included in their agreements with television stations are not being 100% fulfilled, achieving 15% more than reported by their media agency

ABOUT OUR CLIENT

World food producer, with more than 100 years of experience in the industry and an advertising investment of more than 400 million Mexican pesos, placing it in position #30 in the ranking of advertisers and with a clear strategic vision of marketing in Mexico.

THE CHALLENGE

One of the great disadvantages of being such a powerful advertiser at the investment and marketing level is knowing how to control the benefits and take advantage of them. A good negotiation with the television stations in Mexico includes a series of bonuses and commitments by the channels that are later launched by the agency.

In the Mexican market we find a wide variety of type of bonuses among the three main television stations. In the case of TV Azteca, we have approximately 17 types of bonuses that can vary from client to client, depending on the sector and their needs. In Televisa, up to 10 types of bonuses ranging from the very common “impact on rate” to compensation for lower audience. Finally, Imagen, handles about 6 types of bonuses for its clients; we also see that each year this variety is increasing.

What we found with this project was:

  • Lack of visibility on the volume that these bonuses have on your media budget.
  • Little control and monitoring of compliance with the agreements.
  • Lack of confidence in the agency about the reports and the quantification of the bonuses.

Analysis of the contracts. Identify auditable and measurable bonuses
Data collection and support for bonus compliance
Quantification of differences, benefits accomplished and not accomplished

WHAT WE DID

First, Media Auditors carried out an exhaustive analysis of the contracts with the television companies, determining what the quantifiable and auditable bonuses were for the client.

Based on the information obtained, we made a detailed template with which the agency was asked to fill out each of the required items. Other documents that support all the reported data were also requested.

After analyzing the data and quantifying the bonuses, the results were presented to the agency to compare information and present it to the client.

THE RESULTS

Some of the most important points identified by the audit were::

  • 70% of customer bonuses were found to be quantifiable.
  • The Position in the Block by contract corresponds to 37% of the investment, however, only 3.5% of the investment is “positioned”.
  • A profit of more than $300,000 Mexican pesos has been obtained by positioning. If the 37% positioning of the investment by contract had been respected, the profit would have been more than THREE MILLION Mexican pesos in the fourth quarter of the year, that is, ten times more than that obtained.
  • $1,000,000 Mexican pesos have also been obtained for exemption from overpricing in three specific programs. A total of almost TWO MILLION MEXICAN PESOS of increase in purchasing capacity.

In conclusion, from Media Auditors we help the client to achieve:

  • The amount reported by the agency on the quantification of the bonuses consumed was less than $40,000,000 Mexican pesos.
  • The amount audited by Media Auditors was FORTY-FIVE MILLION Mexican pesos, that is, 15% more than reported by the agency.
40% OF BONUSES
44M MEX. PESOS  AUDITED BONUSES
15% MORE THAN REPORTED BY THE AGENCY

Crédito de Imagen: «Designed by Freepik»

 

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