CBS Resists Changes To Integration Fees — MediaPost's Media Daily News

CBS Resists Changes To Integration Fees

Advertisers' latest push to abolish network integration fees has hit another roadblock, this time from CBS. While NBC and ABC declined to discuss the issue with trade groups, CBS participated in a recent meeting — yet showed little willingness to work toward a middle ground.  In the meeting, CBS executives offered some explanations for why the network continues to charge the fees. Among their justifications: commercials that should run 30 seconds are often submitted too long or too short, requiring CBS to contact an agency and work through the logistics.

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CBS officials at the meeting were head of network sales Jo Ann Ross; top pricing and planning executive Dean Kaplan; and an attorney. They met with executives from the Association of National Advertisers (ANA) and the American Association of Advertising Agencies (AAAA) — both of which had asked NBC, ABC and CBS in February to join them on a task force to discuss the practice of charging integration fees. A CBS representative declined comment. Reached while traveling, Bill Duggan, ANA executive vice president, also declined comment, except to say: "We're pleased that [CBS] met with us." A representative for the AAAAs said: "We don't comment on meetings that we conduct." ...Only the three oldest broadcasters charge integration fees. Fox does not, nor do any cable networks--including those within the same conglomerate as the networks that charge them. Within Disney, ABC charges, but ESPN does not. At NBC Universal, NBC charges the fees, but not USA or Bravo. Media agency TargetCast tcm estimates that the three networks collectively took in $125 million in integration fees last year. One source said the top 10 advertisers can each amass costs in the seven-figure range each year, while other large advertisers can run up costs in the six-figure range. ANA's Duggan did say that while advertisers have objected to the fees for years, their opposition has recently been ratcheted up. "That's kind of the new wrinkle in the last half a dozen years — the rise of the corporate procurement officers [on the client side] that are really questioning various costs," Duggan said. "And integration fees have kind of found their way into their sight."