IBF lifts embargo on defaulting agencies

By , agencyfaqs! | In | September 21, 2001
The Indian Broadcasting Federation, which had slapped an embargo on three advertising agencies earlier this week, decided to waive the restriction on Wednesday


The Indian Broadcasting Federation (IBF), which had slapped an embargo on three advertising agencies earlier this week (Monday, September 17), decided to waive the restriction on Wednesday evening. As it emerged, the heads of the agencies concerned - industry leader HTA, its media arm Fulcrum and McCann-Erickson - hurriedly met up with the senior executives of the industry body (over Tuesday and Wednesday) and assured full settlement of the dues within "a reasonable timeframe". While none of the agencies hauled up by the IBF were available for comment, it seems the IBF diktat was aimed at setting a precedent before all defaulting agencies that "the federation means business".

When contacted, IBF executive director Bhuvan Lal refused to talk about why the federation decided to take such a firm stand or, for that matter, if such an embargo can be actually implemented. However, agencyfaqs!'s research has clearly thrown up the gravity of the situation. It appears the outstanding goes back to 1998 and the amount due is more than Rs 500 crore. And that the agencies that were hauled up this time - and who have the largest outstandings till date - were given "ample notice to pay up".

agencyfaqs! also understands that the first step in this direction was taken in February this year when the IFB and advertising agencies' official representative body Advertising Agencies Association of India (AAAI) reached an agreement to, among other things, "monitor and decide upon the course of action on defaulting advertisers, agencies and channels". It was decided then that the duo would work towards clearing all the agency outstandings to the various channels by April 1, 2001.

All the channels and agencies were intimated about the deadline and agencies were warned of a "possible retribution in case of non-compliance". "Since then they (defaulting agencies) have been given several notices and reminders and there has been several rounds of debates and discussions between the agencies and the television channels on the same," points out a senior source in the industry. "When the agencies showed scant regard to the problems facing the broadcast medium, it was decided one has to take exemplary action so that the entire (advertising) industry sits up and take notice," this source told agencyfaqs!.

So now that the embargo has been lifted, does it mean HTA, Fulcrum and McCann-Erickson have cleared up their entire outstanding in three days' flat? Not really. It seems the three have just "committed" to do so. But is that good enough? There have been several such commitments earlier as well. Some of the IBF members would like to believe things are bound to improve post the September 15 embargo. "Being in the same business one really has to trust one another. But if they still don't, other options would be looked into," says an observer.

About the "other options" that could be explored, nobody wants to comment. But one thing is for sure. This would be one hard battle for the IBF. For starters, unlike the INS, the print media guardian, IBF doesn't have the authority to disaccredit and agency on grounds of non-payment. Nonetheless, "a beginning has been made," says the agencyfaqs! source. "And if the panic meetings between agencies and broadcasters are anything to go by, there would be at least some good news by the end of September," avers the industry source.

© agencyfaqs! 2001

© 2001 agencyfaqs!