FRONT OFFICE BY MARY COLLINS

Handling Digital Ads Harder Than It Has To Be

Michael Shimkin (left), ESPN’s senior accounting analyst, explains the value of creating a standardized media industry credit application. He also offers advice on how to evaluate potential local Web advertisers and spells out what he sees as the next steps to make the business more profitable and less time consuming.

Automation has been a lifesaver for media companies as we strive to do more with less. Ironically, the industry’s digital advertising initiatives often require many more manual processes than traditional media buys. BCCA, MFM’s media credit reporting subsidiary, has been working with media companies and the ad community on a solution that will help to tackle part of the problem that we’re calling EMCAPP (Electronic Media Credit APPlication), which would establish a standardized media industry credit application. We are looking forward to its fall launch. 

However, streamlining the credit process addresses just a small part of the greater challenge. Michael Shimkin, senior accounting analyst within the controller’s department at ESPN, says there are also far more “hands stirring the pot” than many of us had originally envisioned when digital media first became a reality.

Shimkin, whose career in media spans more than two decades on both the ad-buying and selling sides, recently spoke with Janet Stilson, editor of MFM’s The Financial Manager magazine, about how he evaluates potential local Web advertisers and what he sees as the next steps to make the business more profitable and less time consuming.

Stilson, a longtime journalist covering the television and advertising beats, has a great sense for the questions many of us have when it comes to improving digital media operations. I would like to share some highlights from her interview with Shimkin, which appears in the March-April issue of TFM.

It has taken many more people to support digital operations. While Shimkin reports seeing “a lot of improvement in the past couple years,” digital sales and campaign management can take a lot of extra people, including additional ad sales, account management, accounting and delivery-data management teams.

The operational complexity extends to the agency side. The agency community also operates different — and often centralized — silos for its digital advertising, including large digital reconciliations teams. Shimkin says, “Sometimes tracking down the correct people to work with is challenging all by itself.”

BRAND CONNECTIONS

Even in the digital realm, “human error” remains one of the most common problems encountered by collections departments. “Having so many groups touching the digital media deals, each with different responsibilities and goals, opens up many opportunities for human error,” according to Shimkin. 

Billing discrepancies continue to be a challenge. These include errors involving the “tags” used by the agency to measure each ad placement, which result in capturing incorrect data. This can be addressed in part by ensuring consistency of coding across agencies. In addition, there are still occasions where the media company’s delivery reports do not match the reports used by the agency, requiring billing adjustments to bridge the difference.

More standardization is needed. One of the best solutions for addressing billing discrepancies involves both the media company and advertiser using the same system for placing and tracking ads. After introducing a new system at ESPN, “the average time a digital media invoice has stayed unpaid has shrunk dramatically,” Shimkin reports.  

Collaboration and communication are key. As Shimkin observes, “I’ve had to work very closely with both internal and external groups — ad sales, sales planning, ad sales operations, ad sales accounting, even our tech department to suggest and test enhancements to our system. Each group has slightly different priorities, and finding common ground is critical. Working together is what will solve problems and prevent new ones.”

Collaboration also helps to address another challenging area for companies selling digital media — determining the creditworthiness of local advertisers. As Shimkin notes in this interview, many of the digital media advertisers are smaller businesses, where there are fewer resources for acquiring credit data. BCCA members share data with each other; other media businesses in the market can also serve as a good source for credit history. 

BCCA’s EMCAPP initiative will be helpful in addressing another credit and collections challenge identified by Shimkin: “Many times the regional deals themselves are more complicated. For example, at times our local dotcoms are bundled with a radio campaign. Other times the campaign is bought through a small arm of a large media company, and the parties responsible for paying aren’t identified properly.”

A copy of the full interview with Shimkin may be found on MFM’s website. In addition, member of MFM and BCCA will be sharing their ideas and successes in overcoming these challenges when they gather for Media Finance Focus 2012, the 52nd annual conference for MFM and BCCA. 

Featured sessions for credit and collection personnel will include an update on the EMCAPP initiative from Michael Denson, VP, network credit and collections for Katz Media Group, who has been instrumental in pioneering the e-solution and moving it forward. 

Denson will also moderate a session entitled “Discrepancies…What Discrepancies?”  that will discuss the Impression Exchange Solution, a standardized approach toward eliminating the types of discrepancies Shimkin identified. 

Additional sessions, including one entitled “Transforming into the Digital World” will address such digitally-relevant topics as cross media ad sales, local advertiser relationships, improving the ad sales — accounting relationship, automated processes and digital credit policies. These sessions are interlaced with other credit-focused sessions such as those covering political advertising; working with advertising agencies; and collection metrics. 

The convention will be held from May 21-23 at Caesars Palace in Las Vegas. This year’s conference is appropriately themed “Stacking the Deck in Your Favor,” and it will. It features tracks addressing specific challenges faced by managers in newspaper, radio, TV and emerging media as well as. As our track of BCCA sessions indicates, our agenda is stacked with presentations designed to help all the industry’s media ventures put together a winning hand. I look forward to seeing you there.

Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary. Her column appears in TVNewsCheck every other week.You can read her earlier columns here.