Advertisers-TV networks scuffle over ad rates

 In a response to IBF's announcement, ISA has issued a release stating its disapproval. When contacted, ISA chairman Bharat Patel told Business Standard, "ISA has contacted the World Federation of Advertisers and they have in turn informed us that nowhere have they come across a clause like this. This act by IBF is unprecedented."

 Likewise, sources in IBF and the Advertising Agencies Association of India (AAAI) have informed that marketers are unhappy with the developement especially since it comes during festival time, when advertising rates are at their peak. Almost 60% of the total television advertising spends are expended during the second half of the year. "Most advertisers have long-term deals with television
 broadcasters. With IBF now demanding 25% surcharge, it is breach of contract," said an executive with a leading media buying agency.

 "ISA has always believed that media rates should be negotiated and decided by an advertiser and its agency, with the media house concerned, and no third party or industrial association has any role to play in deciding the commercial terms. The ISA, therefore, rejects the proposal of the IBF regarding this adhoc increase in rates," said the release. "We have advised all our members to reject any demand by any broadcaster to implement IBF guided rate increases but rather, to be guided by the merits /demerits of individual broadcasters/channels while deciding rates. "

  "If broadcasters feel the renumeration prices are not high, then that is due to market forces at play. Today, there is variety in the market with mutiple channels. In such an environment, if sellers impose structures it is unfair," said a top notch executive of a leading media buying company.

 Broadcasters, on the other hand, beg to differ. "Media buying agencies and advertisers always determine the rates and ,accordingly, broacasters offer discounted prices. Going forward, it is not possible for channel networks to continue in the same fashion. A hike in rates was due for sometime now," said a source at IBF.

 Industry sources inform that AAAI is likely to issue a statement on Wednesday after its executive committee meeting.