Earlier this year, the GRP Pilot, testing a new way actors who perform in television commercials are paid, got underway. More than 2,000 commercials are being tested to see if a GRP (ratings)-based compensation model will work. The results of the Pilot will be the centerpiece of negotiations with the unions that are scheduled to begin in October 2011. If adopted, this model will revolutionize the way advertisers pay actors. Some advertisers will pay less; others will pay more. But for the first time since the union agreements were adopted in the 1950s, there will be a measureable correlation between what an advertiser pays actors and their ROI on those costs.

Many advertisers are participating and more are being invited to do so. Surprisingly, some advertisers who have been asked to participate have declined, citing concerns over confidentiality of the data they share in the Pilot, or because they do not like the idea of paying on GRPs (fearful of paying more than the current model requires).

Without question, confidentiality of the data is critical, but the concerns on confidentiality in the Pilot are unfounded. PricewaterhouseCoopers is running the Pilot under strict confidentiality requirements. PwC routinely handles highly confidential information for advertiser clients, many of whom are competitors. They have never had a breach. The same standards are being applied in the Pilot.

Fear of how a new payment model will affect costs is understandable. That is the precise reason we are running the Pilot—to see where price changes will occur and to adjust the model to insure equitable distribution of costs. By not participating, an advertiser will not have the opportunity to raise real, measurable concerns, and the JPC will not have an opportunity to take those concerns into consideration. That leaves non-participating advertisers in the dark. If adopted, there will be no choice in how actors are paid—it will be the new model. So not participating is, quite frankly, short sighted. It’s a gamble that the Pilot will have an advertiser in it that has the same media profile as the advertiser electing not to participate. In a Pilot that is dealing with annual industry spending of more than $1 billion, that’s a gamble with very poor odds.

If you would like to participate, please contact Allan Linderman at allan@lindermanmedia.com or call him at +1 805 498 5163. If you have decided not to participate, I urge you to reconsider or to call me to discuss your concerns. I can be reached at dwood@reedsmith.com or +1 212 549 0377.

Douglas Wood is the Chief Negotiator for the advertising industry in its relations with SAG and AFTRA, is General Counsel to the ANA, and is a partner in the law firm of Reed Smith LLP.