The most recent IAS Media Auditing Masterclass examined the often-overlooked aspects of agency spend, where bloated Scope of Work (SOW) estimates and unchecked costs are prevalent. The takeaway? If you’re not auditing, you’re bleeding.
The IAS Media Auditing Masterclass Series—powered by the Independent Agency Search & Selection Company (IAS) in partnership with Media Marketing Compliance (MMC)—continued its eye-opening series with a deep dive into how marketing budgets are subtly leaking revenue not only through compliance issues related to media but throughout the marketing supply chain
MMC’s sharp-witted CEO Stephen Broderick led the session.
Audit or be audited
Drawing from 20 recent audits of non-media agencies, the numbers speak volumes.
A staggering 95% of advertisers never received full campaign reconciliations, even with ‘pay net cost’ contracts in place.
Funds were shifted across campaigns without client sign-off in 80% of cases.
In 100% of these instances, upfront payments were made, yet 40% of the cash was withheld for over 70 days.
“The greatest preventative measure is a strong agreement,” says Broderick.
But that contract must come with teeth.
Clauses on reconciliation timings, rebate declarations, FTE reporting and third-party billing are non-negotiables in a market where agency profit is increasingly squeezed.
Where the margins hide
Clients can sometimes face hidden or unclear costs.
Factors like padded rate cards, built-in contingencies, limited visibility into travel and entertainment (T&E) expenses and inconsistent timesheet practices can make it difficult to track true value.
As a result, margins may be built in more extensively than clients realise.
Timesheet reconciliation, for instance, is often delayed by as much as nine months. Without real-time data, clients can be blind to excessive resources or inefficiencies.
Contracts: Your first line of defence
Broderick and IAS CEO Johanna McDowell stress that vague contracts are a playground for exploitation.
“Prevention is better than cure,” says McDowell.
Clear terms, robust reporting frameworks and regular audits should be standard practice—not a last resort.
Clients are encouraged to assess agency compliance early, establish rules for freelancer approvals and demand transparency throughout the supply chain.
Ambiguity, Broderick warned, only serves one party.
The landscape has shifted
The pressure to extract margin has only intensified as the traditional high-volume media cash cow dries up.
“Meta, Google and now Amazon have disrupted the volume game,” Broderick explains.
“Retail media is going direct—so why should clients book it through the agency at all?”
Broderick cautions clients not to postpone paying attention to audits and contracts. “Clients must wake up,” he says.
“Agencies are under pressure to make margins now, while the industry is in a state of flux.”
The takeaway isn’t complicated: stronger contracts don’t just protect budgets—they build better partnerships. When both sides are clear, everyone performs better.
