One day after the Indian Society of Advertisers (ISA) threatened individual broadcasters with legal action over the surcharge issue, the IBF decided to roll back its advisory for the existing contracts.

In a statement, IBF said that it would call for an extraordinary general meeting soon "to evolve a consensus approach to address the issue of fair value for advertising inventory." It further said that it had no desire to jeopardise or sabotage marketing plans of the advertising community, and has "decided unanimously to advise all members to roll back the application of the 25 per cent surcharge on pre-existing deals."

The row between advertisers and broadcasters has started earlier in the month, when an advisory from IBF said that there would be a levy of a 25 per cent surcharge on all ads across TV channels starting 16 October. IBF had cited increased input costs as its reason for levying the surcharge.

Big advertisers including Hindustan Unilever Ltd (HUL), Procter & Gamble, Bharti Airtel, Reliance Communications, and Marico then withdrew their advertisements from television channels that imposed the 25 per cent surcharge basis the IBF advisory.

Since 16 October, only about 15-20 per cent of total ad flows were on air on TV.

Most broadcasters, including Star, Sony, Zee, NDTV, National Geographic and CNN-IBN, followed the IBF advisory. However, some channels including Aaj Tak, ESPN, Discovery along with some regional players continued the existing contracts with advertisers.

The annual advertising market is estimated at Rs16,000 crore, of which television ads have a Rs6,000 crore slice, though print media is said to have the largest share 50 percent share of Rs8,000 crore.

IBF reportedly says that channels and networks of every size have communicated frustrations with the unfairly low pricing imposed on their advertising inventory by the "indifferent attitude of and monopolistic consolidation tendencies" of Advertising Agencies Association of India''s (AAAI) member agencies.

Adding further, it says that while this surcharge move has been stridently criticised by some vested interests, there is little evidence of a desire for constructive dialogue with IBF.

According to IBF, it has aired the issue of Fair Value for Television Advertising right into the broad public domain, and is "greatly heartened as an important message has thereby gone out."

Clearly, the fight is far from over, with more to come. For now, however, the broadcasters and advertisers have both returned to their corners, to re-strategise, and wait the bell to commence round two of the action.

(Also see: What''s the spat over TV ad surcharge?)