Broadcasters and advertising agencies are likely to be on warparthsoon over recovery of Rs 450 crore-plus of advertising revenue due to broadcasters from major advertisers. In a significant move, the Indian Broadcasting Foundation (IBF), the apex body of broadcasters, has decided to dissolve its joint working committee with the Advertising Agencies Association of India (AAAI). The IBF has alleged lack of sincere efforts on part of the AAAI as the main reason for severing the nine-year old association, which is responsible for collection of all outstanding dues to broadcasters from advertisers. Even the advertising agencies earn their 15% commission once these dues are recovered.
?In our previous board meeting, it was decided that we will not renew our tie-up with the AAAI,? a senior functionary of the IBF told FE on conditions of anonymity. ?The AAAI has not been able to recover our dues from various media agencies and advertisers despite our best efforts. The dues have swelled up significantly in the last several months,? the IBF functionary said.
When contacted, Shashi Sinha, head of a sub-committee of IBF-AAAI and CEO, Lodestar Media, said: ?As far as I know, our joint sub-committee is scheduled to meet on April 26.? However Sinha admitted that the agreement between the IBF and the AAAI ended on March 31 and hoped that it will be renewed.
?If the IBF-AAAI joint working committee does not get an extension, it is indeed a cause for worry for the industry,? Sinha added.
Jawahar Goel, president, IBF, was reluctant to comment, when contacted. He, however, said that the IBF board has informed the president of the AAAI of its decision of not renewing the agreement. ?The joint body between broadcasters and advertisers had become more of a burden,? Goel told FE.
The IBF, comprising top executives of leading broadcasting firms, is likely to meet soon to find ways and means of recovering their money from the advertising industry. ?We did business before IBF-AAAI and will continue to do so in future too,? a senior IBF member said.
The IBF-AAAI committee has been in existence for past nine years and it was formed to recover the outstanding dues from the media agencies and their clients within the agreed credit period. It is also the main body to resolve any disputes arising between the broadcasters and advertisers. Two years ago, IBF-AAAI body renewed their agreement and extended the credit period for the advertisers to 65 days.