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IBF-AAAI resolve net billing issue

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MUMBAI: The stalemate between the Indian Broadcasting Foundation (IBF) and the Advertising Agencies Association of India (AAAI) on the net billing issue has been resolved and the blackout by the former on accepting TV ads has been lifted.

According to IBF board member and Star India CEO Uday Shankar: “We have an agreement to do net billing. But we have also created a mechanism in the invoice and contract to enable agencies to charge the fees separately from advertisers effective 1 May.”

An IBF board meeting is scheduled for later today, revealed Shankar, in order to communicate to broadcasters to resume ads.

As per the solution hammered out by the two: the invoices that broadcasters raise to agencies will have a rider below which states that the advertiser and agency are free to have a compensation relationship which is as per accepted industry practice. The agencies will then charge clients their commissions on top of that in the bills they present to them.

“Basically, what this means is that the broadcaster can bill the agency Rs 85 for a Rs 100 value TV spot,” says an industry veteran. “The agency can then bill the client for an amount not exceeding 1.1765 of the net value of the bill.”

TV commercials are expected to begin airing on channels from today.

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