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Advertisers fight to get blurbs heard

'Clipped' ads a sign of bigger problems

TAIPEI — The goal of most television advertisers is to make sure their messages cut through the clutter. But advertisers using Taiwan’s cable systems have a simpler aim: making sure their ads get seen at all.

Look for an ad for a multinational corporation on some of the island republic’s cable systems, and you’re likely to find it has been replaced by a commercial for a local noodle joint.

They call the practice ad “clipping,” and it has become one of the most serious problems facing Taiwan’s cable industry today.

On some channels, almost 80% of ads are clipped in favor of local substitutes. Major advertising agencies are compiling a blacklist of channels that don’t carry the ads they’re supposed to.

But a complex thicket of government regulations and pass-the-buck avoidance means the problem won’t be solved soon. “This has been a problem for some time, but recently it has reached crisis proportions,” says Simon Twiston Davies, executive director of the Cable and Satellite Broadcasting Assn. of Asia (Casbaa).

With 80% cable penetration and a large, affluent middle class, Taiwan should be one of the most lucrative cable markets in the region. But stiff competition and a government-imposed cap on monthly fees means more than 200 last-mile cable operators are feeling the pinch.

The government has shown no inclination to raise the fee cap. In the meantime, clipping ads is the only way many operators can balance their books.

Beating the errant cable providers with a stick probably wouldn’t work.

But foreign channels aren’t even able to threaten the last-mile operators, because they rarely negotiate directly with them. Instead, the three cable giants who own most of the country’s pipes act as “agents” for the smaller operators, who are mostly located outside major metropolitan areas.

Contracts are far from standardized on ad-related issues and are usually signed with agents rather than smaller cable players themselves. When it comes time to complain, the agents refer the channels to the smaller cable providers. Most of the time, they hardly know where to find them.

Casbaa’s members haven’t given up their struggle, but it’s not likely to be over soon.

Twiston Davies and senior executives from Columbia TriStar, News Corp.’s Star Group, Walt Disney Television and the National Geographic Channel recently held a meeting with Taiwan’s Government Information Office and its Fair Trade Commission.

Government reps say they see clipping as a contractual problem, and not something they can solve. Twiston Davies says ad clipping is “holding back investment in the Taiwan market.”

Now if only he could get his message through.