The issue is whether or not media owners use the removal of commission to implement a surreptitious rate increase; and this will impact upon our mutual clients – not the agencies.

What should also be explored, at the same time, is a movement to structure payment terms from Agencies to Media Owners on a 45 or 60 day basis. It is a well known fact that many agencies, particularly the global agencies have issues with clients that have global contracts allowing anything from 60 to 90 day payment terms on vastly reduced revenue models.

The recession has seen many clients stretch payments their payment cycle, and yet the media owners are unwilling to recognise flexibility on payment terms may be a necessary evil in these times to ensure our industry as whole (and this includes the media owners) survives.

These are industry wide issues and not media owner versus agency. Or CAANZ versus non member agencies; we need to work together collectively to come up with a sustainable model for all.

Advertising Agencies are CLIENTS!
Advertisers are CLIENTS!

And without showing either of the above parties’ value in your offering, whether you’re a media buyer, creative director or network broadcaster, you won’t win their business, let alone trust, loyalty and continued investment.
Surely the goal is to attract clients to utilise TV as a medium and if it works they will come back and spend more because of the “value” it holds for their business.

Question: If the commission rate was reduced to say 10%, would the “additional” revenue TVNZ generates go back into funding quality programmes to attract higher ratings and lift TV media industry appeal to customers or will the dollars head straight into government coffers to be swallowed up by Wellington’s bureaucracy leaving audiences to put up with the same dribble played out each week? As a taxpayer and viewer, I sure want to know! And what if they do invest more in programming, what will they buy that they don’t already have access to? Sport??….hmmmm

The debate on where the commission levels should sit can be geared either side of the argument but essentially the answer lies with striking a suitable balance between profitability and viability. A review is long overdue and if some belt-tightening is required, it shouldn’t be at the expense of cutting off circulation to some advertising agency’s legs.
That being said, media suppliers are also “feeling the pinch” and agencies should also be asking themselves, what “value” do media suppliers get from the current deal?

Whatever is decided TVNZ needs to tread carefully. Its days of monopolising TV advertising have gone. Clients have other cost effective options to choose from and will vote with their wallets (and advertising schedules) if value is not delivered.