Media24 changes ad policies to kill agency commission

Correction: This article originally stated that The SpaceStation is a media buying agency. It has been amended to reflect the fact that it is a media sales agency.

Media 24 on Friday announced that, as of 1 May, its rate cards will no longer reflect the long-established 16.5% early settlement or agency discount fee.

The fee, which has long been a bone of contention in the media buying space, essentially allows media buying agencies to take a portion of the fee for placing an ad with a publisher.

Building system into their own offerings has allowed media to discount the cost of placing ads, ostensibly because the agency saves the publisher the cost of direct sales and billing.

According to a letter issued by Media24 CEO Esmare Weideman, the Naspers-owned publisher is cutting the commission as a precaution against amendments to section 73A of the Competition Act, gazetted on Friday, 22 April 2016.

The amendments create criminal sanctions for certain contraventions of the Act, with any users found to have engaged in collusive or cartel-like behaviour liable to face criminal charges.

While Media24 does not acknowledge any wrongdoing, it is worth noting that it owns a media sales agency — in the shape of The SpaceStation — alongside its various magazine, newspaper, and online titles.

The SpaceStation represents amongst others, Media24’s digital properties across 24.com, Media24 Lifestyle and Media24 News.

“Media24 sincerely apologises for the short notice and inconvenience this will cause advertisers and advertising agencies,” Weidemann writes. “Given the serious nature of the matter, Media24 believe these changes are in the best interest of all parties”.