ANA, 4As Update Industry on Integration Fee Issue

None of the three networks asked to join the Association of National Advertisers and the 4As on a task force to discuss the practice of charging network integration fees have agreed to do so.

Two of the networks have agreed to meet to discuss the integration fees, though they are not willing to take part in a task force, while the third has not responded after three requests.

On February 19, 2008, the two associations formally invited television networks to join them on a task force, to be convened no later than May 1, to address the practice of charging such fees.

Only ABC, CBS and NBC currently charge network integration fees, which add up to an annual bill to advertisers that totaled $125 million in 2007 (as estimated by TargetCast), according to the ANA. The association goes on, “In addition to the $125 million, network integration fees have other hidden costs to both agencies and advertisers - they are a burden for agencies to administer and the extra manpower required to do so invariably costs advertisers more in labor fees.”

In a statement, the ANA has said it is prepared to engage in the following practices moving forward:

• Hold continuous ongoing dialogue with members as they evaluate their television buys over the coming months and years.
• Encourage all marketers to understand the cost of network integration fees for their own company.
• Encourage marketers and their agencies to discuss the reason for these fees with ABC, CBS and NBC at every opportunity.
• Highlight network integration fees at appropriate member gatherings, including committee meetings and conferences.

Network integration fees will be debated in a session entitled “10 Media Issues in 50 Minutes” on May 5 at ANA’s Advertising Financial Management Conference, to be held at the Ritz-Carlton in Naples, Florida.