The memo was also sent to ad agencies and major advertisers, two industry groups directly effected by TV pricing practices that have spiraled out of control since the fourth quarter of last year.
The MAA is not telling TV broadcasters how to run their business. “This is a free market, but there needs to be some order,” said Cheng.
Over the past six month TV stations have issued price updates as often as several times per day.
“We negotiate a price with the TV station in the morning, and then discuss it with our client,” said Cheng. “Then we queue the spot, and get a phone call telling us the price has gone up.”
Media agencies hope that at a very minimum, TV stations can put their price changes on paper that can be shown to clients. Ideally, the whole industry could establish guidelines on how price changes are announced, or barring that, individual channels could create their own.
Two broadcasting groups, ETTV and Sanli, have already formulated and issued their own voluntary standards.
“Without this, clients wonder if the problem is with the media agency and not the broadcaster,” said Cheng. “Pricing standards would help us communicate with clients and enable us to function as media planners on their behalf.”