The Advertising Association of Thailand (AAT) is set to release
guidelines for fee-based pricing to its members next month, using US and
British models.
The move was brought on in part by the Asian financial crisis which
ravaged Thailand's advertising industry, but the change has been
accelerated by media specialists coming into the market.
AAT president Pornsiri Rojmeta said these newcomers had undercut
traditional agency commission structures and were forcing companies to
review pricing strategies.
"Clients used to pay 17.65 per cent commission for every service," she
told MEDIA.
"Media specialists charge seven per cent but fail to recognise how
agencies can make a living and stay in business.
"We continue to receive a number of complaints from our members, so our
first priority is can we move forward and get fair compensation in line
with the Western world."
Feedback from members has been mixed, with some asking for a combination
of fee-based and commission pricing.
"The AAT can't force the head of an agency to follow our way," said Ms
Pornsiri.
"We can educate and motivate to agree to an industry standard and offer
a range of pricing and services."
The AAT will propose extra incentive fees for agencies which are able to
move a client's sales up by 110 per cent beyond target for products
featured in advertising campaigns.
Agencies which refuse to embrace change and stick to traditional
commission structures will have a difficult future, Ms Pornsiri
cautioned.
"Anyone who can continue with commission based pricing only is very
lucky," she said.
"We have to be smart and use both percentage commissions and fee-based
pricing.
"The new thinking has to be to cover costs and make a reasonable
profit."
