Renegotiation of rent contract
Regular compliance checks are a must if marketing services contracts are to be adhered to. Agencies have to take the lead on this. Image Credit: Stock image

The Emirates had been a commercial hub for the region long before even its formation as a country. It’s business conditions, multilingual population and ease of connections made it the destination of choice for the headquarters of multinationals.

Support industries also established themselves here – among them the marketing services and advertising industry. The COVID-19 has had an impact on almost every sector, meaning advertisers are being far more prudent with marketing investments.

In fact, ad spend in the region fell by up to 20 per cent in 2020, according to WARC. Therefore, justifying and accounting for every dollar spent is ever more essential.

Marketing budgets are now spent with an increasing variety of marketing agencies offering everything from media buying to creative development to handling influencers. Two aspects have to be managed carefully by these advertisers:

• Are the agency services and costs clear and justifiable?

• Is the advertiser paying the agreed cost? What about the discounts agreed to?

There can be a disconnect between what is agreed and what is actually paid or recouped, particularly in multi-year, multi country contracts.

Since many of the largest advertisers are headquartered in the UAE, they invariably want their strategic marketing agency partners to be based here too. To give marketing advice, but also manage and implement projects at a country level.

This is especially true when it comes to creative agency networks. Local understanding is particularly relevant, whether in terms of dialect, or to ensure that a localised look-and-feel are achieved.

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Localisation comes with layers

While a marketing campaign may be developed in the UAE for multiple Middle Eastern markets, getting the degree of localisation required without appointing suppliers in each market means the regional advertiser just has to brief its UAE-based agency, which can then subcontract jobs to a local partner or an affiliate.

As with creatives, several print management companies have their headquarters in the UAE to service brands’ regional needs. They offer a one-stop shop handling all the production of high-volume materials, for everything from supermarket stands to countertop displays and printed material.

They will also manage the logistics around the region with a single payment option. This allows advertisers to consolidate spend with one company, which manages the buy, in a similar way to how media agencies offer a single point-of-contact to buy advertising inventory.

No agendas, please

But there is the risk that transparency suffers and advertisers must ensure that third-party agency selections are not to a closed pools of bidders, to push up commissions.

Media auditing to ensure media buying agreements are being kept is essential – but the same scrutiny of contracts is needed across marketing services. As the touchpoints between brands and consumers grow, more channels and suppliers are involved.

And because most advertisers operate across multiple countries, there is the added layer of complexity. With increasing investments and layers come the risk of erroneous charges, misapplied mark-ups and commissions, and a lack of transparency in selection and use of third-party suppliers.

Compliance checks

Ensuring brand guidelines are adhered to, identifying the intermediaries used and avoiding foreign exchange variances means extra vigilance and control is required. This will make sure quality is maintained across all assets and that any related relationships remain fair.

Advertisers need full transparency in who these sub-contracted partners are, to ensure their brand’s reputation is protected. After all, if things go wrong, it will be the brand’s name making the headlines for the wrong reasons, not the local supplier.

Working in the current unusual business conditions means keeping a close eye on contract compliance. For marketers and procurement teams to be able to demonstrate to finance that their marketing investments are getting a fair return and avoid the dreaded annual budget cut, an audit is often the best way to start.

Marketing and media auditing needs to extend across relationships with multiple suppliers to ensure full transparency. Be it media, creative, digital, sales promotion, event management, PR and more, the contracts agreed are a bond of trust.

Scrutinising the compliance of contracts and making ongoing corrective actions improves the relationship between advertiser and supplier.

The best business relationships require – above all else – that those involved deliver on their promises. And it is within the contract, that those promises are laid out. This is why contract compliance is vital for both ongoing and future relationships.

And the checks and balances to abiding by the agreements are determined by auditing.

- Stewart Morrison is Managing Director - MENA at FirmDecisions.