Eight Key Indicators That CMOs Should Conduct a Contract Compliance Audit [White Paper]
January 20, 2017
Across nearly every industry, cost-cutting initiatives have led to procurement officers exerting more influence over marketing budgets. Consequently, marketing cuts are now often viewed like cost reductions in other spend categories—as steps to a better bottom line. But with marketing, it’s not that simple.
Marketing requires a complex integration of efforts, from advertising to media buying, social media, web design, public relations, events, and promotions. And, with the rise of digital media buying and rapid evolution of new media channels, marketing has become today’s most intricate spend category.
As a result, marketing typically views agency spend as an investment to be maximized, not minimized, which can be at odds with procurement’s desire to achieve cost reductions. This can undercut agencies’ ability to build company brand, attract customers, and drive revenue.
So, what can CMOs do to meet company objectives while maintaining marketing effectiveness? For many, the best approach has been neither dramatic cuts nor stubborn resistance. Instead, CMOs are focusing on transparency, communication with procurement, and analysis of agency contracts.
After all, given the intricate nature of agency contracts, compensation methodologies, and pass-through practices, undetected non-compliance associated with multi-year contracts can be easy for CMOs to overlook, and can quickly erode the company’s margins.
Therefore, in this white paper we discuss a number of scenarios and indicators—either intentionally or unintentionally—that signal it’s the right time to bring in an experienced auditor.
An agency audit can be an invaluable tool for ensuring compliance with contract terms and use of effective operating procedures. Further, it can help to uncover significant financial savings (e.g., overbillings, unused funds), as well as verify compliance with media buying guidelines, identify financial and marketing impact, improve transparency, and enhance internal controls.
Want to discover when you should hire an auditor to meet company objectives and realize greater transparency, accountability, and savings? Contact SC&H Group’s Contract Compliance Audit practice here