Radio Connects member stations to deal in net dollars

Change will streamline process with non-broadcast media, takes effect Dec. 2019.

Commercial radio broadcasters are the latest converts to transacting ads in net dollars, a shift set to take effect Dec. 30, 2019.

Caroline Gianias, president of Radio Connects, tells MiC the move streamlines the process for media planners working with both traditional and non-broadcast media, the latter of which already deal in net.

“Television and radio were really the last to change that,” Gianias explains. “So this just unifies that everybody is now dealing in net dollars.”

The move comes after years of increasing demands from media agencies to offer a different billing format on request.

Gianias explains that for planners drafting multichannel media, they will no longer have to net down gross dollars. For clients who bill direct, there will be no difference in how they transact.

She explains that there may be some “outliers” who continue to do business the best way they see fit based on established client relationships, pointing to radio stations in smaller markets, but explained that it’s meant to apply to the largest radio networks in Canada, such as Bell Media and Rogers.

“This really has been at the request of the six networks buying out there,” she says. “Really they’re the ones initiating it with the major broadcasters.”

RadioConnects has worked alongside TV industry advocacy group ThinkTV on the project. RadioConnects members include Bell Media, Cogeco, Corus, Rogers Media, Jim Pattison Broadcast Group, Stingray, Zoomer and others.

The practice of transacting on gross dollars is older, although it still persists in some analog media. Gross media cost is the amount an advertiser pays to its agency to place an ad with a media seller (such as a radio broadcaster). The term originated when agencies’ commission rates were more standard and fixed; “gross” applied to the total cost whereas “net” is the price without the commission fee included.