THE State Government has come under fire from advertising industry players who claim the implementation of a new billing system for its master media contract was rushed and will increase costs.
The new invoicing system, which unbundles government agency billing, came into effect on November 1.
Previously the master media agency – Marketforce’s Media Decisions – was paid a gross figure for media services and then passed on a commission to creative agencies.
Media Decisions is now paid a net media cost and creative agencies must bill their government clients for services and commission.
Following the changes, Media Decisions’ fees have increased and the government is collecting an additional administrative fee of 0.5 per cent.
But according to Department of Treasury and Finance principal contract consultant Peter Easom, there should be no increase in costs to either government or advertising agencies.
The Brand Agency director Steve Harris said one of his biggest clients, Water Corporation, will end up paying an additional $10,000 on its $1.5 million advertising spend.
However, the main concern for Mr Harris and other industry members spoken to by WA Business News is the issue of insufficient notice.
Advertising agencies were advised on October 22 of the new invoicing arrangements.
A meeting between industry representatives and the Government took place on October 29, at which time a request was made to extend the date of implementation. The Government declined the suggestion.
Marketforce group managing director John Driscoll said the process would involve more administration for his company. Media Decisions was not profiting from the new arrangement, he said.
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