Today, organizations around the world need to be on the pulse of governance frameworks covering their marketing investments. They need audit services and technology software solutions for optimizing marketing investments and ensuring transparency built into its ad agency contract terms, invoicing, and transactional data. Having audited over $800 billion in global marketing spend in 84 countries, yielding more than $1 billion in client value and savings, DG2 Worldwide Group (DG2) is widely renowned for its global strategic consultants, data scientists and subject matter experts who provide advertising and marketing contractual compliance audits, performance assessments, consulting services and technology solutions.
Fortune 500, Fortune US 1000, and other medium and small-sized companies invest massive funds to support their marketing efforts and build brand awareness. As a result, a lot of the ad agencies receive rebates, discounts, and other types of benefits from these companies, but the agencies do not always refund those discounts and rebates back to these companies, which means they lose much money for reinvesting in their brands. DG2 helps plug such leaks. But that’s not all. While providing advertising and marketing contractual compliance audits and performance assessments are DG2’s core competency, the company is also innovating by introducing technology into the industry. “We are doing this through DG2-MD®, our real-time reporting and continuous monitoring tool, which was built to provide a centralized source for the data from these organizations,” said Michael Lay, founder and CEO of DG2 Worldwide Group.
DG2-MD® provides Continuous Monitoring as a Service (CMaaS), which bridges ad agency invoicing data gap by ensuring real-time marketing spend control and recovering refunds. Client users can explore data through the DG2-MD® dashboard and also independently with data exports.
From the very beginning, DG2 has opted to look at all data rather than a subset of data which has allowed it to view the movements and tendencies of the media and advertising industry while trying to yield greater marketing spend transparency and visibility for its clients. As contract compliance experts in the media and advertising space, DG2 reviews large data sets as the complexity and volume of transactions have increased in this segment. Observing data is the core competency of DG2, with each engagement that demonstrates the need to implement innovative data monitoring techniques and technology.
“We are subject matter experts in the Media and Advertising Compliance space. While there is significant competition in the data reporting field, DG2’s differentiation comes from our experience as a leader in contract compliance and our deep knowledge in the specific data and systems in place in our segment,” explained the CEO.
Technology in Times of COVID-19
Advertising and marketing is a $1.4 trillion industry, but even this industry was hit by the COVID-19 pandemic. The industry showed smaller inclinations towards auditing their advertising and marketing spend during this time. But the companies were still interested in implementing real-time reporting and continuous monitoring technology tools to ensure that they were getting visibility and transparency as it relates to their advertising spend.
“What most marketers want to make certain is that they are getting that transparency and visibility as it relates to their spend. They may be less interested as a result of COVID in terms of auditing their agency – from a contract compliance standpoint – but they want to make certain that they have the tools in place to expectedly manage and monitor their advertising and marketing spend,” commented Michael Lay. And this is something that DG2 has been doing as an organization, probably more so than any one of its competitors. “We have seen investment spending persist when it comes to our technology during the COVID-19 pandemic.”
Investment has, in particular, come in for DG2’s Invoice Processing Services in recent times. “That’s a new technology we rolled out with a number of our clients through which they are now outsourcing all of their invoices to DG2,” said Michael Lay, the founder of DG2. The company’s Invoice Processing Services is a rigorous and compliant
monthly process for reviewing, validating, and approving agency invoices/support documentation to increase spend transparency, eliminate defective spend and ensure policy adherence. “And using our technology, we are reviewing and approving those invoices before our clients. There’s been a major pickup in terms of this service and the technology that we have now implemented in the marketplace,” confirmed the executive.
In addition to the Invoice Processing Services, the company’s real-time reporting and continuous monitoring tool, DG2-MD®, the monthly dashboard was also a success during this time. “Doing an audit does not always resonate with the marketer, but having these tools in place to effectively manage these enormous investments is something that many of these companies are interested in. With COVID, there’s been a greater interest in having DG2 technology tools in place to effectively manage advertising and marketing spend on a real-time or continuous monitoring basis.”
Eliminating Complexity and Helping Industries
In the early stages of DG2, the bigger piece of its financial reviews was about data polishing and data intelligence using a variety of techniques as there was a need to consolidate data that was either system generated or manual input. DG2 found that marketers and agencies were working with inconsistent data in which errors were generated by formatting issues or human error. Data would lack traceability across systems.
Believe it or not, this is still the case today. DG2’s team of data analysts and engineers automate data polishing and data consolidation processes to help. In the marketing industry, there are sub-systems that are commonly used for this, but DG2’s algorithms are trained to take the system-generated data from different sources to normalize it into a consistent format.
DG2 works with every marketer-agency onboarding to adapt scripts and algorithms for seamless integration. “You can think of our solution as outsourcing of data-related functions. We face different levels of complexity in data during onboarding, and there’s a piece of heavy lifting that our team takes on to bridge the flaws in the data. In the end, the output is industry-relevant insights that procurement and marketing personnel can assess against their core strategies and decision-making tasks,” commented the DG2 Worldwide Group founder.
But even the most trusted of algorithms fail. To tackle this problem, DG2 prioritizes the safeguarding of data with cloud computing-based warehousing. The company also implements continuous integration and continuous deployment for continuous testing. In terms of releasing software, it uses blue-green deployment, phased rollout, and feature flags. These are ways to control and mitigate risk. “Our working assumption is that no solution is 100% foolproof. This, in turn, brings the tool to high levels of robustness,” added Michael Lay.
Further, DG2 partners with its clients to implement useful Master Data Management techniques to maximize the comparability of data across sources. The company has made it a priority to build a flexible architecture that enables custom structures and formats that align with each organization’s data model.
Growing With the Times
DG2 platform of solutions is adapted to the times. “While system investments to manage consumer data has accelerated, we see a complementary need for real-time reporting of advertising and marketing spending, budgets and compliance to ensure that advertisers maintain full visibility and control to make decisions in real-time,” shared Michael Lay.
DG2 has built its data model to be flexible and adaptable, integrating with multiple systems to accommodate the needs of its clients in a cost-friendly manner. The firm uses the reporting capabilities of existing systems to efficiently ingest data and use a robust visualization dashboard to display data in a pre-designed and ad-hoc reporting engine to keep growing with the times.
The company has been continuously innovating in many ways since its inception over twenty years ago to help its clients optimize their marketing investments. But their journey of innovation seems to have just begun as the challenges evolve with the times.
A Case Study
A DG2 Worldwide Group client is a multinational manufacturing and entertainment company that was founded over 75 years ago. Their annual revenues exceed $1 billion, and with over 25,000 people worldwide, they were investing over $500 million annually in worldwide media spend, with its Agency of Record (AOR) handling the majority of its global media purchases. But they had performed limited contract compliance audits and risk assessments in many global markets. They discovered that there was a lack of visibility covering Media Rebates (AVBs), Uncleared Media, Interest on Use of Working Capital, Early Payment Discounts and Hours/FTES/Fees. This client had terminated the agency, and requested DG2 Worldwide Group (DG2) to perform an “exit audit” of its Top 40 markets to ensure that the agency was in compliance with its contract terms, and all credits, discounts, rebates and related benefits were refunded.
DG2 immediately went to work and reviewed, audited, and evaluated the agency for compliance with the client’s agreement. DG2 provided specific contract language and procedures covering all forms of credits, media rebates, early payment discounts and related transactions for ensuring transparency between the client and agency. Further, DG2 helped the client define and structure industry leading reporting methodology, definitions and compensation terms, including “Cash Neutrality” to ensure that the agency was not earning interest on working capital.
As a result, DG2 identified $27.1 million in cost savings opportunities resulting from the agency not disclosing or refunding media rebates, early payment discounts, interest on working capital, credit adjustments and pass-through costs. Further, DG2 helped the client implement Process Control Improvements and contract enhancements to prevent future control leaks and mitigate financial risk between the Client and Agency.
The Leader Upfront
Michael Lay, Founder and CEO
His background includes 40 years of advertising and marketing experience, including 21 years as the former Chief Financial Officer and Chief Operating Officer for WPP, Omnicom and IPG operating agencies, and CEO of global industry audit firms. In 2001, Michael helped launched the first U.S. advertising and marketing contract compliance and risk management firm.
Michael is an avid speaker at various Association of National Advertisers (ANA) events, including “Production Transparency” and “Cash Flow and Payment Terms,” and contributor to ANA published documents, including, “Agency Audits: How to Achieve Success.” In the 2017 far-reaching ANA study, “Production Transparency in the US Advertising Industry,” DG2 was recognized as the only global audit firm that is a “Subject Matter Expert” that has a “broad, deep, and diverse understanding of the advertising production industry.”