Top Story

e4m_logo.png

Home >> Advertising >> Article

Exceptions do not make the rule, AAAI stand by 15% commission

30-October-2002
Font Size   16
Share
Exceptions do not make the rule, AAAI stand by 15% commission

Cautioning not to get carried away by 'hear-say' about some stray instances, the Advertising Agencies Association of India (AAAI) has advised its member agencies not to violate the INS rules on their 15% commission.

The Indian Newspaper Society (INS) in a communication to its accredited ad agencies has warned that it is going to 'carefully scrutinize the operations of accredited agencies as and when required and disaccredit agencies that are found to have violated the INS rules and regulations.' AAAI pointed this INS communication to its members in a special notification sent by its President, Sam Balsara. Based on both number and volume, majority of the business conducted by its member agencies is on 15% commission, claims by AAAI.

Speaking to exchange4media, Preet K Bedi, CEO of TBWA\Anthem said, "As far as my knowledge is concerned, more than 90% of the agencies work on 15% only. All this hue and cry about agencies compromising 15% is a creation of media only especially a leading business daily which did speculative and ill researched story based on limited facts."

Santosh Desai, Executive Vice President, McCann-Erickson says, "Generally it is the smaller agencies which tries to lure clients by offering a percentage of the 15% commission to them. But by and large, the big agencies desist from such tactics of discounting."

AAAI accepts that 'a handful of advertisers who for a variety of reasons may be operating on a commission or fee that is lower than 15% but claims that a few exceptions do not make the rule.' It admits that under certain circumstances there may be a deviation on this say for example, when the media buying or media planning plus buying are separately paid for.

Stressing on the adequate compensation to the agencies, AAAI further says that large and major professional advertisers recognize the importance of remunerating their agencies well. This allows agencies to have decent margins to invest in people and resources to enable agencies to create effective advertising. Though there has been a trend towards fee system but it does not suit majority of the small and medium advertisers as it often lead to avoidable disputes and souring of relationships.

Tags

Our typical marketing budget is usually 10 per cent of the topline spend

There are some forces impacting the way our business works. The IT/ITeS sector has changed tremendously. Platforms like Twitter have made everyone journalists. Smartphones have made everyone a photographer. The trend that we are seeing is one of hyperdigitalization, which is causing the lines between product and services to blur. For example, <a href=http://www.exchange4media.com/company/news/amaz...

The OOH sector is among the fastest growing, globally. Brands and marketers have realized its potential and impact and begun to craft medium-specific adverts. Self-regulation is not only necessary but also essential to growth of the sector. The industry needs to exercise a certain level of this self-restraint to prove its commitment to maintaining the best standards in advertising.

<b>Clients are looking for experiential solutions beyond radio or print: Abraham Thomas, Radio City 91.1 FM</b><br><br> From entering new markets to launching large format events, Radio City 91.1FM has been on a roll. The radio channel recently announced the launch of India’s biggest singing talent hunt-Radio City Super Singer Season 8. Earlier this year, the channel set up its own creative-cum...

The interesting animated rap music video encapsulates Droom’s ecosystem tools and their role in facilitating second-hand automobile transactions

Perfumes are invisible and these new ads from Skinn create a story out of this

New campaign aims at first-time users by providing ‘first-night free’ – a first-ever offering by the brand on online hotels booking