The Advertising Agencies Association of India (AAAI), with 40 leading agencies as members, is in the process of setting up an internal committee to deal with the issue of credit, non-payment of dues and other legal aspects related to its contracts with the advertisers. The committee will be headed by Bates India managing director & chief executive Madhukar Kamath.
According to AAAI president Ramesh Narayan, the need to set up the internal committee was felt especially after the high-handed manner in which the Indian Broadcasting Foundation (IBF) handled the issue of embargo on advertising agencies. Last month, the joint working committee of the IBF and the AAAI had blacklisted three leading advertising agencies for non-payment of dues to television channels and the commercials released by them were taken off air.
Unhappy with IBF's handling of the issue, the AAAI officially suspended the joint working committee of the two bodies formed earlier this year. "The joint committee will function again only when the differences are ironed out," said Narayan. To discuss the future course of action, the AAAI executive committee will hold a meeting on October 8.
As far as the new internal committee is concerned, Narayan said that besides dealing with outstandings, it will also work towards streamlining the contracts signed between the agencies and the advertisers. Till now the advertising agencies do not ask a client to get a 'no objection certificate' (NOC) from the previous agency handling its business. As a result some clients move their business from agency to agency without clearing earlier dues. "Though an NOC may be impractical, but we'd try and put a system in place for a 'no dues' certificate," he added.
IBF sees quick dues settlement post-embargo
Encouraged by the advertising agencies' quick response in clearing their dues towards TV channels after the embargo, the Indian Broadcasting Foundation (IBF) is now calculating the outstandings between April and July 2001. IBF officials say that the total outstanding for this period is between Rs 40-50 crore. Once the dues are calculated, the defaulting agencies will be sent notices to clear the payments. Currently, the IBF is taking up the outstandings issue only with the member agencies of the AAAI.
However, soon it plans to send notices even to the non-AAAI agencies which have defaulted in making payments to the channels.
