The Indian Broadcasting Foundation (IBF) and the Advertising Agencies Association of India (AAAI) have decided to clear the air between them. Recently, both organisations had differed on various counts leading to the disagreement and hence, non-renewal of the IBF-AAAI deal and issues such as net rates and cost input surcharge amongst other things. At a meeting held a week back, members from both the bodies got together and agreed that there was a need to begin working together again.
Both the bodies discussed various issues that have been the bone of contention between the two, and one of the first steps taken is on the broadcasters’ demand to exercise correction in advertising rates.
The IBF and AAAI have formed a four-member committee that would look into the ‘right value’ for all channels. The two members that the IBF has nominated are NDTV Media, CEO, Raj Nayak, and President, Ad Sales, STAR India, Paritosh Joshi. The two members that the AAAI has nominated are Lodestar Universal, CEO, Shashi Sinha, and MindShare India, MD, R Gowthaman.
The objective to form this committee is to amicably arrive on a metric that would be able to determine what the rate ‘correction’ for a channel would be. As yet this committee has neither met nor has the discussion on this gone forward due to the Diwali holidays. Hence, it was difficult to determine how this committee intends to take forward this initiative fairly, given that everyone has an agenda and the stakes are high.
Official comments from either of the bodies were not available at the time of filing the report, but it is understood that the IBF and the AAAI will seriously consider the recommendations of this committee. It should be noted that the surcharge issue really doesn’t come under the scanner with this. Broadcasters have stated in earlier instances that the surcharge was a tool to increase the ad rates for the channels. If this committee is able to address this ad rate correction issue to the satisfaction of most (channels, agencies and advertisers), it is possible that the need for a surcharge, in the manner that it was levied, might not be felt.
The committee would bring under the scanner, points such as what is the right value for the channels; what is the mechanism to determine this right value; does it change from channel-to-channel and how. The Indian Society of Advertisers (ISA) is also expected to be brought in the picture on a later stage, once the issues between the AAAI and the IBF are resolved.