Media Forum: Is commission flat broke? - Does the latest Aegis row spell the end for commission, Alasdair Reid asks.(Interpublic Group of Companies Inc.)

It's astonishing the number of times the commission system has seemingly been pronounced dead in recent years. Take, for instance, the financial crisis at Interpublic Group, which prompted it to break ranks and position itself as whiter than white - promising to meet the highest standards demanded by new Sarbanes-Oxley accounting rules in the US and end the kickback culture prevalent in media trading in many markets around the globe. Naming no names.

All of which served to remind everyone concerned that the commission system was a means of trading barely fit for the 19th century Especially as agencies were seeking to position themselves as business consultancies, offering high-level strategic communications advice, rather than as dim gofers paid piecework rates.

And then there's been the rise of Google and other internet media owners, who've made it their business to find ways of trading directly with advertisers themselves. As we move towards an era where all media will be digital, it would seem, in theory at least, that there's very little room for a system that makes agency remuneration the responsibility principally of the media owner rather than the client.

In any case, some advertisers demand all the commission back again and leave media agencies to forage for a living on the investment cut they can take on the money while it's passing through their hands. As, indeed, the latest dispute between Aegis and media owners tends to show. Aegis has served notice to some small media owners that it intends unilaterally to change its settlement terms, currently (depending on the medium) 25 to 31 days, to 60 days.

Keeping the money for longer will make it work harder for Aegis - and Aegis is traditionally the group that makes a virtue of working for the most competitive of commission rates.

This, surely, only goes to prove how silly the whole business has become. Isn't it time we moved on? Jim Marshall, the chairman of Starcom, clearly thinks so. He says: 'In most other business sectors you can think of, suppliers tend to have variable terms of business with their customers. Why not advertising and media? My feeling is that it's sort of happening anyway, and that we are holding on to the last vestiges of the system for less than convincing reasons. And maybe this is something we have to look at an industry [trade body] level.'

Perhaps, Bob Wootton, ISBA's director of media and advertising, responds, but the real world tends to be rather more complicated. He says: 'Our view in general is that this is not a game between strangers. ...