Posted November 30, 2018 08:17:56 Aussie advertisers who want to keep their ads on local radio stations should pay attention to how the industry operates in Australia, according to a report by advertising consultant Tucker Carlsons.
Key points:Advertisers can pay to broadcast their ads through a radio ad buy agreement (RAA)It is unclear how many companies are involved in the processAdvertiser pay can vary depending on how much money they are paying for advertisingIt is the first time the Government has looked at the RAA process, which has been criticised for not providing enough transparency into the pricing of advertising and is not legally enforceable.
The RAA, which is a voluntary contract between radio stations and advertising agencies, allows advertisers to spend up to $15 million a year on advertising in the states, territories and the ACT.
But it can be complicated and requires many parties to sign contracts.
The Government has commissioned a study to identify the most common pitfalls and pitfalls in the RTA and how the Government could ensure that the RDA is being applied fairly and effectively.
The report is expected to be released on Thursday and is expected give a clear picture of how the RBA is operating in Australia.
“The key thing is it’s a voluntary agreement, so there is no legal requirement to pay up.
So we are able to make a recommendation to the Australian Competition and Consumer Commission on what the best way to deal with these issues is,” Mr Carlson said.”
It’s a matter of public consultation and there is a range of stakeholders.”
We have a range that we want to be able to reach, and I think we have done that.
“The RTA is designed to allow radio broadcasters to charge up to 15 per cent more than other advertising agencies.
Mr Carlsson said there were two major pitfalls.
First, there was the fact that radio stations had to pay the RAAA the amount of money they were charging them for advertising in a radio market.”
This is a fee that is not regulated by the Australian Communications and Media Authority, so it’s not clear whether it is a fair fee to pay or not,” he said.
Second, advertising agencies had to spend money on advertising to make up for the costs of advertising in radio.”
Advertising agencies also have to pay back this fee if they are unable to attract the advertising they would normally charge,” Mr Carroll said.
Mr Carroll said this meant advertising agencies were often paying more for advertising than they would for advertising that would be broadcast on their own radio station.”
They are paying to advertise on a local station, but that’s not what the RMA is looking for.
It’s looking for radio station ads, radio ads that are done for a regional or local audience, advertising that is delivered through a direct mail service, through a digital platform,” he explained.”
So, it’s very challenging to figure out how to do this properly.
“As a result, they have to do all of that upfront, and then pay the radio station for it.
That means it costs them a lot of money.”
You would expect them to do that for a fair price, and it would seem that they do not.
“Advertisors have to consider the RGA’s proposed change to the broadcast code, which would require radio stations to use their own advertising to get their radio ad spots onto air.”
If they have a radio station, and they have advertising, they can also broadcast it for free to their listeners, but they have no control over that advertising,” Mr Carlson said.
This means advertisers must be wary of how much advertising they will be able afford.”
Because radio stations can’t charge for their own ads, they also have no option to charge for other people to be heard on their stations, so they’re competing with other stations for the advertising that they want,” he added.
Mr Carlson is concerned the RIAA has not had a proper discussion on the proposed change.”
I think they should have looked at that in advance, and the way it’s set up, and put it into action.
I think it’s an awful lot of work, it will take a long time to get it all right,” he warned.”
One of the big problems that we have with this is that it’s all done on the back of a voluntary model.
“Advertising watchdog ACCC warns of “serious flaws” in the advertising industry’s RAA systemMr Carlson said the Government needed to be clear on what it was doing in its dealings with the RCA.”
What they should be doing is taking a look at this and looking at the way in which they are actually implementing this.
They need to look at the rules and regulations around advertising in Australia and look at how this is working for them and how they are working for the industry,” he suggested.
The ABC has contacted the Federal Government for comment.