TVNZ has announced it will be reducing the January rate card by 11.1 percent from its 2010 rates to reflect the controversial drop in agency commission from 20 percent to 10 percent on 2 January 2011. So, according to mathematical sources who apparently know how to use calculators, that appears to be an overall rate increase of 0.1 percent.
When TVNZ's decision to cut commission was announced around one year ago, the Association of New Zealand Advertisers and other industry bodies warned that “any change from the current practice of commission payments cannot be a cost increase by another name”. TVNZ said it wasn't but Lindsay Mouat, ANZA's general manager, said it would be watching closely to ensure its commitments were met.
TVNZ's head of sales and marketing Paul Maher, who might be due to become a bit of a punching bag for out-of-pocket agencies come January, reiterated TVNZ’s commitment to the changes in commission remaining cost neutral for advertisers.
“Our January rate card reflects this commitment," he says. "I am positive on the outlook for January. With our programming line up for ONE and TV2 being formulated using similar strategies to previous years and having a strong summer focus, I am confident we will continue to dominate the ratings."
MediaWorks wasn't keen to comment on the rates issue. And would only say that it will be keeping a watching brief to see how the market reacts.
When TVNZ announced a six percent rate hike in April (as a result of increased optimism and solid numbers), it got into a bit of a stoush with OMD, after OMD hardballer Steven Tindall demanded a bit more pant dropping from the national broadcaster and threatened to take its clients to MediaWorks.
Check out TVNZ's rate card here.