Agency commission falling away on rate cards
A number of media owners have announced they will exclude the long established 16.5% ‘early settlement discount’ or ‘agency commission’ from their rate cards.
In a statement released by Media24, the publisher said that its decision “… follows amendments to section 73A of the Competition Act, gazetted on Friday 22 April 2016 and effective from 1 May 2016, which creates criminal sanctions for certain contraventions of the Act. In terms of the amendments to the Act any conduct that is found to be collusive or cartel-like is a criminal offence. Having assessed its exposure, and without acknowledging any wrongdoing, Media24 has decided to take these precautionary measures to create certainty and avoid any regulatory and legal risk.
“The industry-wide practice of making available a 16.5% early settlement discount or commission to media agencies which book advertising with Media24 properties – including all newspapers, magazines and online platforms – has been in existence for decades. In order to avoid legal risk or regulatory exposure we have revised all our rate cards from 1 May 2016 and are in the process of communicating the changes to all media agencies. New rate cards will exclude any agency commissions or early settlement discounts.”
Caxton has followed sui,t saying it will operate on the basis of a 15.5% advertising agency fee for accredited advertising agencies, with a further 1.5% settlement discount, where payment is effected within 45 days.
The Media Online reports that DStv Media Sales already “amended the settlement discount structure for media agencies that book advertising on DStv platforms in order to address any legal uncertainty regarding our compliance with the Competition Act”.
— MarkLives’ round-up of top ad and media industry news and opinion in your mailbox every Monday and Thursday days. Sign up here!