| Guidelines
for accepting new members |
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Membership
of Advertising Agencies Association of India (AAAI)
is based on the basic
principle that members are full-fledged advertising
agencies or Creative Agencies or
Media Agencies.
Historically, some clients who work with more than one
agency, have for the purposes of better centralized
co-ordination and greater efficiencies, been entrusting
their total media buying and releases to one of their
‘club’ agencies.
In such cases, where an advertiser has multiple brands
being handled by different agencies, it could be in
the interest of the advertiser to entrust the media
planning/buying/releases to one of its ‘club’
agencies for the following possible reasons:
Co-ordination in media planning and media selection
among each of its brands;
Co-ordination in scheduling of releases
among each brand;
Greater cost efficiencies based on total advertiser
spend in individual publications/channels/programmes,
etc.
Rules governing Media Buying / Agency of
Record [AOR]
The remuneration principle for an AOR is as
follows:
| 1. |
For the services
rendered in the areas of media buying and media
releases,
the AOR will earn 2.5% media commission/trade
discount on releases made
by it for brands which are handled by other advertising
agencies of the
advertiser. The other advertising agencies will
earn 12.5% commission/trade
discount. |
| 2. |
The AOR will be responsible
for raising media bills, collection of media dues
from the advertiser and payment to media. |
| 3. |
The other advertising agencies
of the advertiser shall be paid the 12.5%
commission/trade discount on media releases for
brands handled by them,
directly by the advertiser. |
4. |
The AOR will provide not later
than the end of the following month to the other
advertising agencies, a statement which clearly
indicates the other advertising agencies’
commission/trade discount entitlement for the
preceding month for various brands. |
In case an advertising agency operates on the basis
of a fee system, the basis of
remuneration shall be as follows:
| 1. |
In the event that
the agency is responsible for acting as full service
agency,
including media buying and releases, such fees
should not amount to less
than 15% |
| 2. |
In the event that media releases
are undertaken by another agency acting
as an AOR, such fees shall not be less than 15%,
including that paid to
AOR |
| 3. |
Agencies operating on a fee
basis will raise supplementary debit/credit notes
at the end of each financial year to ensure that
their earning from media
equals 15% |
4. |
Agencies operating on a fee
basis with any of their clients, will inform the
AAAI of the same along with a declaration that
they adhere to the principle
of 15% |
The Executive Committee of the AAAI is authorized to
take disciplinary action against any member for violation
of these rules, including recommending expulsion to
the General Body, if it deems fit.
Relevant Rules and Regulations regarding admission are: |
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1]
ADMISSION : |
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It shall be
open to the Association to admit as its Member,
Associate or
Provisional member, any organisation, firm
or company which independently
carries on the business of Advertising Agency
and conforms to the minimum
standards of business practices and professional
skills prescribed by the
Association for the purpose. |
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2]
TYPES OF MEMBERSHIP : |
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There shall
be three types of membership as under:
[a] Members
[b] Associate Members
[c] Provisional Members |
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3]
ELIGIBILITY FOR MEMBERSHIP : |
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a. Membership
of the Association shall be open only to organisations,
firms or
companies practicing advertising. Members
:
b. Any organisation, firm or company
carrying on advertising profession and
having a permanent office in the territory
(i.e. India) covered by the Association
and which conforms and agrees to conform
to the minimum
standards of business practices and professional
skills as may be prescribed
by the Association, from time to time, is
eligible for the Membership of the
Association.
Associate Members :
c. Any organisation, firm or company which
operates as an Advertising Agency but has
no permanent office within the aforesaid
territory covered by the Association
is eligible for admission as 'Associate
Member'.
Provisional Members :
d. Such advertising agencies which are
operating within the territory covered
by the Association and which do not fully
comply with the provisions as prescribed
by the Executive Committeeto the standard
of full-fledged membership may be enrolled
as Provisional Members. Provisional Member
must qualify for full-fledged membership
within two years from the date of admission. |
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4]
APPLICATION FOR MEMBERSHIP : |
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Those
eligible and desirous of becoming members
of the Association shall
fill in the membership application form
as may be prescribed from time to
time by the Executive Committee and
send it to the registered office of
the
Association |
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Membership applications
received would be considered by the
Executive
Committee in accordance with the procedure
it may lay down from time to
time |
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The decision of the
Executive Committee shall be final.
The Executive
Committee is not under any obligation
of explaining the decisions on
membership applications |
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When an application
for membership is rejected, the applicant
is debarred
from making a fresh application within
six calendar months from the date
of rejection of such application |
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5]
MEMBERSHIP CATEGORIES AND GROUPS : |
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For the
purpose of admission and for determining
subscription payable by
Members they shall fall under one of the
under mentioned Categories and be
classified into the following Groups on
the basis of revenue or income booked.
Each Member Agency shall submit before 28th
/ 29th February every year,
a certificate from a Chartered Accountant
confirming the Agency’s revenues for
the latest audited accounting year.
a. Categories
Agencies are categorised further under the
following classifications:
(i) Full Service Agency
(ii) Creative Agency
(iii) Media Agency
b. Groups
A Member can opt to get himself classified
under any one of the above
Categories based on the type of service
he provides. Options once
exercised shall hold good for a minimum
period of three years. All Agencies
will fall under one of the four Groups given
below based on the Revenue in
the previous financial year. |
| Group
I |
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Shall comprise of members
having revenue in the previous
year up to Rs.25 crores |
| Group
II |
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Shall comprise of members
having revenue in the previous
year above Rs.25 crores but up to Rs.
50 crores |
| Group
III |
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Shall comprise of members
having revenue in the previous
year above Rs.50 crores but up to Rs.75
crores |
| Group
IV |
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Shall comprise of members
having revenue in the previous
year above Rs.75 crores |
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6]
MEMBERSHIP SUBSCRIPTIONS FOR ALL CATEGORIES : |
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a. Every member
of the Association shall pay yearly subscription
fixed as under. In Group I alone, in order
to provide for lower subscription from
smaller Advertising Agencies the Group is
subdivided in to three sub-groups.
Group I will however be dealt with together
for all other aspects
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Annual
subscription payable by members falling
under Group I –
Sub Group I A with revenues of up to
Rs.5 Crores - Rs.10,000/-
Sub Group I B with revenues of over
Rs 5 Cr and up to Rs.15 Crores
- Rs.30,000/-
Sub Group I C with revenues of over
Rs 15 Cr and up to Rs.25 Crores
- Rs.60,000/- |
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Annual subscription
payable by members falling under Group
II - Rs.1.00 lakh |
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Annual subscription
payable by members falling under Group
III - Rs.2.00 lakhs |
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Annual Subscription
payable by members falling under Group
IV - Rs.3.00 lakhs |
b. Every Provisional Member shall pay annual
subscription of Rs.50,000/-
c. Every Associate Member will pay annual
subscription of Rs.50,000/-
The above subscription fees shall be effective
from the year 1st April 2009 onwards unless
the Member has paid the subscription for the
year 2009-10 on
the day of passing of this resolution at the
earlier prescribed level. |
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7]
ENTRANCE FEES : |
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a. Member:
A flat entrance fee of Rs.1,00,000/- shall
be payable by every
agency admitted as a member, from hereafter
b. Associate and Provisional Member:
Every Associate and Provisional Member shall
pay entrance fee of Rs.50,000/-. On his being
admitted as a member, he shall pay further
entrance fee of Rs.50,000/- |
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8]
PRIVILEGES OF MEMBERS : |
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a. Each
member of the Association shall be entitled:
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to one
vote only which can be exercised at
all meetings of the Association or its
committees where he serves as a member; |
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to attend and to participate
in decisions, act and vote at all the
meetings of the General Body of the
Association;
[Explanation: Each member agency shall
nominate its representative
on the Association. He shall vote for
his agency. If he is unable to
attend a meeting he may participate
and vote through a proxy duly
notified as hereinafter provided] |
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to attend and to participate
only in zonal activities of the Association
through their respective branches in
the respective zones; |
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to obtain gratis all
free publications of the Association;
and |
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to the free use of
the Association’s library and
such other facilities which the Association
may provide from time to time for its
members |
b. Privileges Of An Associate Member Or
Provisional Member:
Each of the above categories of members shall
be entitled
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to participate
in the activities of the Association,
but will have no right
to vote at the meetings of the Association
or its committees; |
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to obtain gratis all
free publications of the Association;
and |
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to the free use of
the Association’s library and
such other facilities which the Association
may provide from time to time for its
members |
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9]
QUALIFICATIONS FOR MEMBERSHIP : |
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a. Method
of Application:
Each applicant shall be required to fill in
the appropriate application form obtainable
from the Association and such application
should be duly proposed and seconded by any
two members of the Association
b. Size of Agency:
The size or volume of business in itself of
any applicant shall not be a
factor in determining qualifications for membership.
c. Location of Agency:
The geographical location of the head office
or the registered office shall determine the
zone of the agency.
d. Age of the Agency:
No agency shall be considered for election
as a member of the Association unless it is
operating as such for a minimum period of
one year. This condition can be waived by
the Executive Committee for admitting new
members in the year 2009-2010, since new Category
of membership is being introduced.
e. Ownership:
The applicant agency must show that it is
directly and indirectly independent of and
not maintained by any one advertiser or a
group of advertisers and/or is not organised
for the purpose of obtaining agency commission
for any one advertiser or a group of advertisers.
f. Ability:
Advertising ability varies with individual
talent and need. It is difficult to standardise.
Nevertheless sound judgment regarding the
applicant agency’s ability can and may
be formed after studying its method of operation
and the work produced for clients.
g. Financial Stability:
Applicant Agency will have to satisfy the
Association regarding its financial
stability and healthy payment policy.
h. Contracts:
No applicant shall be deemed worthy of membership
who has failed to fulfil its lawful contractual
commitments.
i. Scope of Agency Service:
Ability to render service in reasonable conformity
to the agency service standards of the Advertising
Agencies Association of India shall be a consideration
in determining fitness for membership.
j. Ethical and Business Standards:
While it is not important to know the applicant
agency’s form of organisation in all
of its details, or all of its operations,
it is essential to know how it operates in
relation to certain practices declared by
the Association to be unfair practices in
the light of the obligation agencies have
not only to their clients but to the media
they deploy, to the public and to each other.
The Executive Committee of the Advertising
Agencies Association of India reserves its
right to accept or reject any Application
of Membership without specifying any reason. |
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