Now, AAAI objects to IBF's proposal

Following ISA's rejection of the broadcasters' 25 per cent price hike, the advertising agencies' association has stepped into the ring

The IBF's (Indian Broadcasting Federation) proposal to increase advertising rates on television by 25 per cent has been met by complete resistance by advertisers and agencies alike. ISA (Indian Society of Advertisers), in response to IBF's move, issued a statement rejecting the proposal. Now, the AAAI (Advertising Agencies Association of India) has issued a similar statement to its members stating that it "strongly objects to the Broadcasters' Association recommending to its members that they should renege on valid and existing contracts entered into with members of AAAI.

IBF justified its proposal citing a decline in advertising revenue due to "flat prices", in contrast to the expanding cable and satellite television industry. Naturally, this has led to an outrage among the advertising and media fraternity -- its members calling the move "arbitrary", "unilateral" and even "illegal".

While the ISA has clearly rejected the IBF proposal, AAAI, in its statement, seemed open for negotiation. "While AAAI understands the prerogative of a broadcaster to determine prices, the AAAI does not recognise broadcasters acting in unison in the matter of pricing,” it said.

When contacted, AAAI's vice president and CEO of JWT India, Colvyn Harris, was quick to say, "It's not that we are taking a stand. They (IBF) have a point of view. We have a point of view, and advertisers have a strong point of view. We will work out a solution where nobody loses. We will work jointly for a solution." He added that so far no such discussion had taken place, and that it was too early to comment on what solution AAAI will be proposing.

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