22-Point Agreement Reached Between Mainstream Media, Advertising Agencies

The Advertising Association of Nepal (AAN), National Advertising Association Nepal (NAAN), Nepal Media Society, and Media Alliance Nepal collectively announced the code of conduct during an event held in Kathmandu on Wednesday, to make the Nepali advertising market orderly, dignified, transparent, and inclusive.

The concerned bodies of advertising have implemented a code of conduct to  benefit the stakeholders, including media organizations, advertising agencies, and advertisers.

Sudip Thapa, president of  AAN; Dharmendra Kaji Shrestha, president of the NAAN; Shubha shankar Kandel, chair of the Nepal Media Society; and Bhaskar Raj Rajakarnikar, president of Media Alliance Nepal, signed the agreement. A single professional agreement has been signed between umbrella organizations of advertising agencies and umbrella organizations of mainstream media organizations to implement the code of conduct.

The code of conduct is seen as a watershed moment in the history of the media business, advertising agencies, and advertisers, all of which are struggling as a result of the economic downturn that began with the Corona outbreak.

The media industry has been hit hard by the government for the past few years, which has tightened the advertising expenditure in various sectors, including education, insurance, health, and alcohol.

Key Points Of Agreement

1. It should be registered and renewed on a regular basis after going through the necessary procedures with the Nepalese government authorities and the advertisement board. You need also be a member of the AAN or NAAN.

2. The advertising agency must have at least five employees and the physical infrastructure required for advertising business as specified in the schedule issued by the Nepal Advertising Association or the National Advertising Association, as well as be a member of the AAN or the NAAN.

3. In order to do advertising-related business with the media, an advertising agency must get a 'No Objection Letter' from the media or its affiliated organizations once a year.

4. An advertising agency with an annual revenue of 50 lakhs and at least three separate advertisers would be regarded eligible to perform institutional advertising business. By the year 2081/82, the annual turnover of commercial advertising agencies should reach 1 crore.

5. Mainstream media and media professionals who profit from advertising business must publish the list of agencies registered with the advertisement board and retain it on their website.

6. Affiliated advertising agencies must possess bank guarantees or cash bonds as per its media policy while doing advertising-related activities.

7. The AAN or NAAN, both of which are registered with the Advertising Board, should be the sole agency dealing with the mainstream media. Similarly, while dealing with mainstream media, agencies should only work with media associated with the Nepal Media Society and Media Alliance Nepal.

8. The minimum rate will be Rs. 500 per column per centimeter in print medium and Rs. 1000 per minute in television. The media cannot decrease the minimum advertising charge. If any outlet engages in business linked to advertising at a lower rate than the specified rate, the media shall be barred from doing business related to advertisement for three months.

9. Advertising firms may not charge less than Rs 6 lakh per year or Rs 5000 per creative concept.

10. The advertiser cannot be excluded from the advertising agency's 15% commission and the media marketing agency's maximum extra 7% charge. The funds should be utilized to support agency operations, physical infrastructure and technology, upgrades, human resources, professional development, and professional returns.

11. Media involved with this agreement must publish and publicize their prices for advertising-related activity, keep them on their website, and notify the Advertising Board.

12. When declaring the rate of advertisement, the type of the discount (corporate, frequency, governmental-non-governmental, etc.) and, even if there is a four-party agreement, the minimum rate must be revealed in accordance with point this agreement.

13. If the media intends to conduct a rate scheme at any time or under any circumstances, the rate shall be made public. However, the minimum rate cannot be lowered.

14. The advertiser must pay the agency within 30 days after receiving the bill, while the agency is required to pay the media within 60 days. If the agency does not pay within 60 days, the arrears must be paid with interest at a rate of 15% per year calculated from the date of publication of the advertising.

15. If the amount specified in the media bill is not in accordance with the agreement, but both the agency and the media agree to pay, both will be fined.

16. If the advertiser wishes to terminate the agency's relationship with the advertiser, the advertiser must pay the agency the whole due sum within 30 days. If payment is not received within 30 days, the AAN and the NAAN shall publish a circular terminating business with the advertiser, which agencies and media should follow. Agencies and media that are doing new business must halt all dealings with that advertiser.

17. In the event of an advertising, the bill of sale shall explicitly state the name of the relevant advertiser, agency, and release agency.

18. To make the advertising market more transparent, the popularity of media outlets should be assessed by the severity of the content, and fees should be set         accordingly.

19. The mainstream media will not interact directly with any advertiser. In such cases, the media will be able to communicate directly with the advertiser.

20. Sponsors' corporate ads at events, meetings, seminars, barter, and other media-supported promotions may not be published or broadcast in the name of Free Spot. Furthermore, barter-related ads shall be routed via the agency, with a 15% service charge paid to the official agency. Internal services, such as shipping and internet services, do not need payment of a service charge to the agency for barter advertising.

21. If any advertising agencies' or media's previous accounts have not been reconciled, they must be reconciled by the end of Poush 2081, while new advertisements must follow this agreement beginning on Shrawan 1, 2081.

22. If a contract with a media advertiser is for less than the minimum rate, it shall be canceled before the end of Poush 2081. If any advertising contracts were entered into prior to the execution of this contract, proof must be given to the appropriate committee.