Media, ad bodies sign agreement

A code of conduct has been signed between the Advertising Association of Nepal (AAN), National Advertising Association of Nepal (NAN), Nepal Media Society, and the Media Alliance Nepal. On Wednesday, Sudip Thapa, President of AAN, Dharmendra Kaji Shrestha of NAN, Subha Shankar Kandel, Chair of Nepal Media Society, and Bhaskar Raj Rajkarnikar, Chair of Media Alliance Nepal, signed the agreement.

This agreement aims to implement a code of conduct between umbrella organizations of advertising agencies and mainstream media organizations. It is intended to improve advertising business management and monitoring procedures. Currently, a significant portion of government funds allocated for advertising is lost due to improper practices, resulting in the media receiving only a small share of these funds.

Government policies that limit advertising expenditures in sectors such as health, education, and insurance, and ban advertising in certain areas like alcohol, have financially harmed media companies that were established with substantial investments and provide numerous jobs. Creating a supportive environment for media operations is considered a shared responsibility, and there is a growing concern that failure to regulate the advertising business and media may lead to serious issues in the future.

One key objective of this commercial partnership agreement is to ensure that advertising in mainstream media is conducted exclusively through affiliated advertising business organizations (agencies). This measure aims to standardize advertising rates and promote healthy competition, thereby benefiting both advertising businesses and media organizations.

Key points 

 

• Agencies must be registered and regularly renewed with relevant Nepal Government agencies and the advertisement board, and be members of AAN or NAN.
• Agencies must employ at least five staff and have the necessary physical infrastructure as specified by the AAN or NAN
• Agencies must obtain a ‘No Objection Letter’ annually from the media or related organizations to conduct business with the media
• Mainstream media and media businesses that earn income from advertising must publish and disseminate lists of agencies registered with the advertising board and keep this information on their websites
• Affiliated advertising agencies are required to maintain a bank guarantee or cash bond as per the media’s policy for advertising-related business
• Mainstream media should only conduct business with AAN or NAN-affiliated agencies registered with the Advertising Board. Agencies must similarly work only with media affiliated with the Nepal Media Society and Media Alliance Nepal
• Minimum advertising rates are set at Rs 500 per column per cm in print media and Rs 1,000 per minute on television. Media cannot offer rates below these minimums, and violation will result in a three-month suspension from advertising business
• Agencies must charge at least Rs 600,000 per year for creative concept design and Rs 5,000 for each creative concept
• Advertisers must adhere to a 15 percent commission for agencies and an additional maximum seven percent fee for media marketing agencies. This fee supports agency operations infrastructure, technology, human resources, business development, and returns. Media marketing agencies must operate at the set media rates
• Media affiliated with this agreement must publish and broadcast their advertising rates and maintain transparency on their websites and with the Advertising Board
• Advertisers must pay agencies within 30 days of receiving a bill, and agencies must pay the media within 60 days. Delays will incur a 15 percent annual interest rate from the date of the advertisement publication
• Advertisers leaving an agency must clear all outstanding dues within 30 days. Failure to pay will result in a business ban issued by AAN and NAN, enforceable by all agencies and media.
• To ensure market transparency, advertising rates should be based on the media content’s popularity and quality
• Mainstream media should not engage directly with advertisers, except for event-related dealings