By Guest Blogger, Douglas J. Wood
In 2009, through the collective bargaining process, advertisers won the much sought after right to test the impact of a potentially paradigm shift in how they pay actors in all nationally televised commercials. This model -- the GRP Model -- uses audience delivery (GRP’s attained) as the key compensation variable, in line with the way advertisers budget and measure the results of advertising spend and their ROI. Today, residual payments to commercial talent are calculated using an outdated, complex formula mostly based upon number of airings with no relationship to ROI.
Tomorrow could be the dawn of a new era where residual payments will be calculated based on GRP's, but this shift cannot happen without your help.
The Joint Policy Committee (JPC), the advertising industry’s multi-employer bargaining group established by the ANA and 4A’s to negotiate with SAG and AFTRA, are inviting advertisers to participate in a Pilot Study of the GRP Model that will determine how the industry moves forward. The Pilot, being designed and conducted by PricewaterhouseCoopers, will compare the aggregate amount currently paid by the industry for commercial talent with the amount that would be paid using the proposed GRP Model. The Pilot can work, however, only if we have enough advertisers participating.
Here’s why you should participate in the Pilot:
- The industry and the unions could accept the GRP Model as early as April 1, 2012. If accepted, the GRP Model will be the sole methodology to pay union talent appearing in nationally televised commercials that air on broadcast, cable, syndication and/or unwired networks. And in the future, the principles of the GRP Model will be extended to all broadcasts, replacing the current system in its entirety. Advertisers and their agencies that participate in this Pilot will benefit significantly with insights to the precise impact the GRP Model will have on their budgets and systems.
- At the conclusion of the Pilot, the results will be reviewed and – if necessary - adjustments made to the talent payment formula so that in the aggregate there will be no significant increase or decrease in the total amount paid by the advertising industry to the talent as a whole. However, there may be shifts among individual advertisers. Wouldn’t you want to know how you’ll be affected and be part of the focus on adjustments?
- PricewaterhouseCoopers is highly experienced in protecting sensitive client data. They understand the data shared is proprietary and extremely confidential and will treat it as such by using SFTP sites allowing for encryption. So you can be assured all of your data will be protected.
To participate in the Pilot, you’ll need to notify your talent payment company and media buying agency and authorize them to release the following data to PricewaterhouseCoopers:
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TALENT PAYMENT COMPANY
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Talent Use Authorization
Final Cast/Completion Report
Performer Session Information
Performer Session/Holding Information
Residual Amount (including session fees, holding fees and guarantees)
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MEDIA AGENCY
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Weekly media schedules from the prior week (no costs or ratings estimates)
Affidavits of actual airings
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So don’t be surprised if you get a call from the ANA, the 4A’s or the JPC with an invitation to participate. Please be part of this groundbreaking study and be a step ahead if the GRP Model is adopted. Or better yet, call or email Douglas Wood, the JPC’s Lead Negotiator or Allan Linderman, the JPC’s media consultant. You can reach Doug at dwood@reedsmith.com or (212) 549-0377 and Allan at allan@lindermanmedia.com or (805) 498-5163.
The choice is simple – be a part of the future or a relic of the past.