Govt. measure takes advertising market by storm

An emergency ordinance published by the government in the Official Gazette at the end of last week caught the entire advertising industry unprepared.

The ordinance was published in the Official Gazette Nr. 208 on April 21, and alters the way the advertising industry and the National Audio-visual Council works.

The stipulations of the emergency ordinance include the following:

–         The advertising agency can intermediate the purchase of advertising space on TV only if it is empowered by the advertising beneficiary (the client) to represent it

–         The ordinance takes out the rebate (which represented an important part in the agencies’ revenues) and transfers it into the relation between the TV channel and the advertising client. In theory, this measure is meant to bring more money to broadcasters

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–         The price offers presented by the intermediaries (the agencies) to the final beneficiaries must be confirmed in writing with the broadcaster

–         The advertising must be paid directly by the final advertising beneficiary (the client) to the broadcaster, based on the invoice issued by the broadcaster to the client.

–         Any exception or tariff advantage, irrespective of its nature, must be on the invoice issued to the advertising beneficiary

–         The agencies can only receive payment from the beneficiary of the TV advertising (the client), and no material benefit whatsoever from the broadcaster

–         The entities that apply for the audio-visual license must prove that the company does not have debts to the state, except for the companies that benefit from special conditions or restructured debts.

These stipulations regarding the advertising industry were the only residual stipulations from another controversial emergency ordinance meant to alter the Audio-visual Law, which was elaborated at the end of last year by the government, but was left unpublished.

Business Review has talked to industry pundits about the possible effects that such an ordinance may have on the industry.

 Otilia Haraga