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CBS Agrees to Discuss Ad Integration Costs With Task Force

May 25, 2008  •  Post A Comment

Of the Big Three networks, only CBS has accepted an offer to speak with a task force formed to address the $125 million in integration fees paid by advertisers.
ABC declined to address the task force, formed by the American Association of Advertising Agencies and the Association of National Advertisers. However, the network said it would be willing to discuss the issues with individual advertisers and their agencies, according to Bill Duggan, executive VP of the ANA, in a blog post.
NBC also declined, saying it preferred to have those conversation with clients rather than through a third party.
The meeting with CBS is being scheduled, Mr. Duggan said.
The issue of integration fees comes up periodically as marketers think about the upfront and other parts of the ad-buying process they’d like to change.
According to Mr. Duggan, integration fees are imposed only by the Big Three networks, and it is unclear what if anything advertisers are getting for that money. At one time they were imposed to cover the cost of manually inserting commercials into program feeds. Now that is done digitally.
Those networks charge a fee of about $470 for prime-time and evening news commercials and $230 for daytime and late-night spots.
“It would appear that the fees are in some way related to media costs, and it’s unclear why that would make any sense,” Mr. Duggan said.
He added that the networks have not increased integration fees for years, which means they can’t be related to labor costs.
“Advertisers are curious to understand the process the networks perform to integrate commercials as well as the physical hard costs associated with that,” he said.

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