Advertisers, Agencies Unite to Battle TV Networks' Integration Fees

28 February 2008

NEW YORK: As The Godfather's Don Corleone famously said of an uncooperative Hollywood producer: "I made him an offer he couldn't refuse." Similar negotiating tactics have been employed for many years by by three of America's big four broadcast networks. 

Since the dawn of time, ABC, CBS and NBC have charged advertisers an incremental fee to "integrate" a commercial into their advertising breaks – a practice not dissimilar to selling a car then demanding extra for fitting the wheels.

Fox alone among the Big Four eschews the practice.

The fees vary by daypart but are fairly consistent from network to network: approximately $470 per unit in prime and evening news and roughly $230 per unit in daytime and late night.

According to TargetCast tcm, integration fees in 2007 totaled an annual oncost to advertisers and agencies of $125 million (€83.95m; £63.3m). 

So it's unsurprising that the American Association of Advertising Agencies and its clientside counterpart, the Association of National Advertisers, have finally reared in protest.

The sole curiosity it that it has taken so long to unite in challenge to the networks. Especially as ad integration, a once-cumbersome manual process, has long been implemented electronically.

Last week, the ANA and AAAA formally invited the recalcitrant networks to join them on a task force (to be convened at latest by  May 1) "to address the practice of charging network integration fees".   

Fumes ANA president/ceo Bob Liodice: "These fees place an unwarranted burden on marketers. We strongly encourage ABC, CBS and NBC to reconsider this practice, as a measure of good faith towards marketers, whose sponsorship enables networks to keep their programming on air."

Four A's president Nancy Hill is of like mind. "Our members are at the mercy of the networks here. The old processes of integrating commercials into media are no longer necessary in this digital era … We look forward to having the chance to discuss this matter with the networks in a fair and balanced way."

As yet, no response has been received from the network trio. 

Maybe the severed head of a favorite horse might hurry things along?

Data sourced from multiple origins; additional content by WARC staff