Commission cut upsets ad agencies

Advertising industry bosses are "dismayed" at Television New Zealand halving the commission to ad agencies and say some smaller agencies will have to shut up shop.

Agencies warned yesterday the commission cut from 20 per cent to 10 per cent would fill TVNZ's pockets and push marketing decisions across the Tasman. The commissions are paid to the advertising agencies when they book airtime on television channels.

Advertisers said they would be watching closely to ensure they reaped the benefits of the cut.

TVNZ says the change is for the better.

It is not clear whether other broadcasters such as TV3 will follow suit or pay a higher commission to gain a competitive advantage.

The Association of New Zealand Advertisers said it was concerned the reduction in media commissions from January 2011 would increase advertising costs.

The Communication Agencies Association of New Zealand (Caanz) said agencies and advertisers under commercial pressure were dismayed by TVNZ's move.

President David Walden said a recent poll of Caanz members had highlighted that 80 per cent of agencies would be adversely affected by TVNZ's commission reduction.