Refunds?! Startup Auditing Political Ad Buys

With so many millions of dollars flying around for political ad buys this year, a couple of guys with years of experience in the field saw a business opportunity. They launched Campaign Media Accountability LLC to audit ad buys for political campaigns and seek refunds from media outlets for non-delivery.

“What we do, as an independent company, is go in and verify and reconcile their media buys,” says Thom Carroll, who started the company this year after retiring from Smart Media Group, an ad buyer for political campaigns. His partner in the start-up is Joe Stoltz, who retired as director of the audit division of the Federal Election Commission  (FEC).

Carroll cites estimates that 1% to 5% of all media buys aren’t actually carried out — and with this year’s frenzied pace of ad buying, he expects that percentage to rise. His firm is out to identify the discrepancies and get money refunded to the campaigns as quickly as possible.

The audits are not aimed at finding lowest unit rate violations, nor are they limited to broadcast TV. Campaign Media Accountability is auditing cable, radio and other media as well to compare orders to ad delivery affidavits and seek quick refunds where the client campaign didn’t get what it paid for.

What’s been found, Carroll says, is that “there are significant dollars that did not happen as they were supposed to and there are refunds due to campaigns.”

With super PACs paying top dollar to get their ads on the air, more and more lower-priced ads booked by official candidate campaigns are likely to get bumped in the final weeks of the 2012 campaign, so Carroll expects to find plenty of cases where an ad buy that was paid for wasn’t delivered.

Due to the heavy ad demand in the final weeks of the campaign, Petry Television President Val Napolitano agreed that many lowest-unit-rate spots are likely to be bumped by ads booked with higher priority at higher rates. “Typically, there’s no notification process until after the fact,” says the TV rep firm head, “and then it’s too late.”

He told TVNewsCheck, though, that he was not aware of any of the broadcasters repped by Petry being audited by Campaign Media Accountability and hit with refund demands.

The auditing firm, which launched in April, will take clients from across the political spectrum. Carroll wouldn’t identify any of them, citing confidentiality agreements. Some choose to pay on an hourly fee basis, but the audit company sometimes works for a percentage of cash recovered.

Asked about competitors, Carroll told TVNewsCheck the only one he knows of is the FEC — and the government agency audits only a small number of federal campaigns.

You might think that the Campaign Media Accountability staff in Virginia would have little to do once Election Day passes on Nov. 6. Not so. Carroll says he’s lining up new clients for post-election audits to recover cash due from media outlets. After all, there are bills to be paid and, for many, another election down the road.