hours after advertisers failed to meet the deadline set by the Indian Broadcasting Federation (IBF), members of the Indian Society of Advertisers (ISA) met on Tuesday and unanimously decided to reject IBF's proposal to levy a 25 per cent surcharge on television ad rates. Late evening, an official release was sent, spelling out the ISA's stand on the whole issue.
The communiqué sent out by ISA said, "Members of the ISA have unanimously resolved to reject the surcharge imposed by the IBF on TV rates. The IBF had directed its members to levy an input cost surcharge of 25 per cent on TV media rates effective Oct 16, 2007."
ISA has also acknowledged that many broadcasters have declined to participate in this IBF decision. The ISA members took note of the several exceptions implemented by some of the broadcasters, such as exemptions for the government/PSUs and those advertisers who do not book through AAAI member agencies. These acts reinforce the fact that IBF's decision to impose surcharge is irrational and arbitrary. Members who have been offered release of ads without surcharge on the pretext that they book through non AAAI member agencies have also confirmed with ISA that they do not agree to the surcharge.
The ISA members reaffirmed their position that media rates should be negotiated and decided by an advertiser and its agency, with the media house concerned, and that no third party or industrial association has any role to play in deciding commercial terms between an advertiser, its agency and media.
The IBF, on the other hand, is unperturbed. When agencyfaqs! contacted Paritosh Joshi, IBF member and also president (advertising sales and distribution), STAR India, he said, "We wanted to reach a peaceful conclusion. After thorough examination of ISA's stand, IBF will make public its final stand." Joshi said that IBF had raised two issues - rising costs and increased deliveries. According to him, both of these issues have not been taken into account by ISA. IBF is expected to release a communication Wednesday morning.