• by Wayne Friedman , David Goetzl  @dgoetzl, February 27, 2008

The thorns of network integration fees still sting marketers and media agency executives. And the Association of National Advertisers and American Association of Advertising Agencies are looking to do something about it--again.

The two big ad associations are starting up a task force looking into these long-time fees--and they want the networks to join with them. The associations have given networks that levy those fees--ABC, CBS, and NBC--until May 1 to join up and start discussions.

"We're going to make it happen one way or another," said an agency executive. "We've extended an olive branch to the networks for an agreement on how to eliminate them. It's kind of up to them to come back to us now."

According the ANA/AAAA, the fees add up to an annual bill of $125 million in 2007. The groups say they are a burden for agencies to administer.

Network integration fees stem from the early days of television, when TV commercials originally produced on film needed to be transferred physically for video distribution.

For years, media analysts and their respective trade groups have said these fees are a nuisance--especially in comparison to the $120,000-a-spot average price to air a commercial on network television these days. According to analysts, this comes to around $500 to $600 each time any commercial is aired in prime time--lower for non-prime-time dayparts, about 0.5% the cost of buying a broadcast network commercial placement.

ABC and CBS declined comment, while an NBC Universal spokeswoman said: "We prefer to discuss these issues directly with our clients." The newer broadcast network, Fox, which started up in the late 1980s, has never charged network integration fees, nor has the CW or its predecessors, the WB and UPN.

"The networks say it's a union issue," says another veteran media buyer, adding that "there is still a technical staffer that needs to push a specific button."

The media executive says every couple of years the marketers and media executives try to combat this activity--and are unsuccessful. Standing in the way are anti-trust issues: If the industry acts collectively, this will result in the scrutiny of federal agencies for possible unfair business practices.

The ANA and the AAAA say this new push came about after an analysis of the network integration fees was completed by the AAAA Media Policy Committee, AAAA National TV/Radio Committee and the ANA Television Advertising Committee.

Previous studies noted that 87% of ANA members, for example, didn't think it was fair to be charged network integration fees by ABC, CBS and NBC.

One possible deal could include a phase out, according to media executives, where the fees are jettisoned after several years of gradual decreases.