Billing For Co-Op Ads: A Pathway To Sanity

My first job in media was as marketing manager for the Champaign, Ill., cable system. One of the most tedious parts of that job was filing for co-op reimbursement after promoting a cable channel. It involved compiling a packet of materials and getting notarization. Imagine my surprise to learn that despite all the advances in digital communication, the 2018 co-op process is virtually unchanged.

Local auto dealerships aren’t alone in relying upon co-op dollars from manufacturers to support annual advertising budgets. As I mentioned in an earlier column, experts say there may be as much as $50 million available in annual co-op ad dollars; and companies like Macy’s and Walmart are looking to maximize these allocations in part to keep their online competitors at bay.

One of the industry’s greatest challenges in helping local retailers take advantage of their co-op dollars involves meeting the manufacturer’s rigorous documentation requirements. As members of The E.W. Scripps Co.’s accounting department point out, these requirements exceed the capabilities of today’s traffic and billing systems.

In addition to providing an itemized bill that contained the usual information including individual prices, the total charge and terms, co-op reimbursement requires supplying auto makers and other manufacturers with “signed page totals for the initial order, signed and notarized pages for what actually ran and other superfluous material.”

Invoicing’s ‘Four-Letter Word’

Given the extra work involved, the Scripps accounting team used to consider co-op “invoicing’s four-letter word.” That perception has changed.

In an article they penned for the current issue of MFM’s The Financial Manager magazine, the billing experts describe how they were able to overcome these challenges, saving time, increasing customer satisfaction levels, and improving their stations’ ability to aggressively pursue co-op opportunities.

Alison Young, a senior director in E.W. Scripps’ accounting operations and a 2017 recipient of MFM’s “Rainmaker” Award; accounting supervisor Kate Brown; and accounting specialist Rachel Noll prepared the article. Their “path to sanity” in managing co-op billing followed these eight steps:

1. Focus on how to change yourself, not your client. Holding to the station’s typical billing practices wasn’t an option. Recognizing their clients needed the extra paperwork in order to get reimbursed, the team adopted the maxim “You can’t change others. You can only change yourself.”
2. Centralize the invoicing process. One of the team’s first changes involved centralizing the invoicing activity, moving it from the local media outlets to accounting operations at the corporate office in Cincinnati. This move allowed Scripps to standardize and improve the accuracy of invoices being mailed to clients. Centralization also relieved local stations of a complex task, allowing them to focus on more value-added activities.
3. Utilize the traffic system’s special-handling and auto e-mail functions. Next, the team examined how to optimize its traffic system for co-op. It reduced the number of special handling options available to stations from 61 to 21, with only 12 related to co-op advertising. This streamlining made it easier to categorize the various types of invoices when they were generated at the end of each month. The group also learned to better use the traffic system’s auto e-mail function, resulting in less time spent on printing, scanning and e-mailing invoices.
4. Find a partner to print and mail invoices. The Scripps accounting team worked with its procurement group to find an external partner to print and mail invoices. In addition to accuracy and timeliness, the vendor selected also allowed it to “household” invoices — send clients all the invoices from various stations in one envelope. This feature was so successful that Scripps also switched its non-co-op invoices over to the new process.
5. Institute an assembly-line process. Even with these changes, there was a fair amount of co-op invoicing that still had to be handled manually. To get out of the paperwork heap, the billing team used Post-it notes to identify the different types of co-op advertising. They also instituted an assembly line, in which storage bins on carts were used to categorize the co-op invoices. The invoices were then walked through the process of getting the signature that certified what aired at the station was correctly represented on the invoice and obtaining a notary’s signature.
6. Determine the feasibility of automated notary signatures and then use, if legally acceptable. Working with another vendor, the group was able to address one of the greatest challenges to the process — notarized invoices — by automating the process. Fortunately, Scripps’ corporate office is headquartered in Ohio, one of the states where electronic signatures are recognized as legal. The law requires that notaries be from Ohio. As the team explains: “All the accounting operations specialists who lived in Ohio had already received their notary public designation. But one of them needed to be present in office on the day invoicing was done and their signature was needed.”
7. Look for results. Once it had implemented the new notary process, the team had successfully automated the procedure from beginning to end. Immediate benefits have included reducing the number of people required to handle co-op invoicing, freeing team members to focus on other projects. In addition, the length of time required for billing was reduced from ten days each month to four. The improvements in workflow also led to increased morale and lower stress levels at month’s end.
8. Work with MFM-BCCA to further improve the process. Additional details on these steps taken by the Scripps accounting team can be found in their article by downloading a digital copy of the March­–April issue of TFM from our website. While the Scripps team has successfully changed what it can internally to respond to the current level of documentation requirements, it can’t change the root problem: the manufacturers’ requirement for signatures and notarization. The authors are among a group of members of MFM and BCCA, the industry’s credit association, working to persuade manufacturers to adopt 21^st century practices for verifying billing information.

Capital Success In The Capitol City

The Scripps team’s work on helping to advance the cop-op billing process industrywide is the latest example of Alison Young’s role as a rainmaker within her company, our association, and the industry.

Young is a frequent presenter and active participant at Media Finance Focus, the annual conference for MFM and BCCA. As its theme of “Capital Success in the Capitol City” suggests, the 2018 conference, which is scheduled for May 21-23, will be held in the Washington, D.C., area, at the Hyatt Regency in Arlington, Va.

Media Finance Focus 2018 is the primary source of professional education for the media industry’s business and credit management executives, including its digital media, video, gaming, publishing, broadcasting and broadband telecommunications enterprises. Confirmed keynoters for the event include Mitch Lowe, CEO of MoviePass, and Avatar Award honoree Frederick J Ryan, Jr. publisher and CEO of The Washington Post, and former president and CEO of Politico and Allbritton Communications.

We will also take advantage of the D.C. location to bring together leaders representing the industry’s diverse trade organizations, including NAB, NCTA, the News Media Alliance and the video games industry. And with 2018 representing a national election year, we will get the latest insights on what to expect by way of highly contested markets and issues from CNN senior political reporter Nia-Malika Henderson.

All told, the conference will feature more than 80 educational session and 150 experts who, like Scripps’ Alison Young, will share highly useful insights and tips for improving your station or company’s financial performance.

A working copy of the agenda may be found on the conference’s website. We hope you will join us; as past conference attendees consistently attest, you will take away actionable ideas on tackling some of your station’s most pressing matters, such as finding a pathway to sanity in managing co-op advertising.

Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary, the media industry’s credit association. She can be reached at [email protected] and via the association’s LinkedIn, Twitter or Facebook sites.