Television New Zealands Announced Changes to Media Commission

10:32 AM, 25 September 2009

ANZA has consistently maintained that any change from the current practice of commission payments cannot be a cost increase to advertisers by another name. We welcome the assurances provided by Television New Zealand of an equivalent reduction in advertising pricing so that this change will be cost-neutral for advertisers.

We will be watching closely to ensure this commitment is met and yesterday ANZA and CAANZ (Communication Agencies Association of New Zealand) have agreed to establish a joint reporting system to provide an objective assessment of advertising costs and audience across media for advertisers and agencies.

The implications of Television New Zealand's change will vary according to whether advertisers are currently paying their agencies via commission, fees or a mix of the two. Advertisers will need to reconsider the commercial terms of their agency partnerships as a consequence of the commission changes. ANZA will work closely with CAANZ to assist advertisers through this transition. Already planned are a series of joint industry workshops to assist advertisers with best-practice agency remuneration methods.

ANZA believes the changes will be a catalyst for open dialogue between advertisers and agencies on the best model for agency remuneration. Many advertisers have already moved to fee based remuneration, often with a performance component. TVNZ's plan will accelerate this evolution.

ANZA also shares CAANZ concerns over the sustainability of smaller media and creative agencies as commissions reduce. It is important for advertisers that we maintain a competitive and vibrant industry, where agencies are fairly remunerated for their services.

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