Squeezing agencies until the pips squeak
Wednesday, June 12, 2013 at 1:02PM
naive editor

There was a recent report in Campaign Asia on the average client payment times to big agencies that we found staggering.

The quoted average time it takes WPP, Omnicom and Interpublic to receive payments was 221, 156 and 276 days respectively.

276 days. That's 9 months! How can any business function this way? Let alone one that operates on already slim margins.

To us it speaks volumes about about how the big agencies are now valued by global clients; how low we as a business have sunk in the food chain, and what little value these global conglomerates put on what we produce.

It also shows just how desperate traditional agencies have become, when even with their already skinny margins, they agree to do business on these terms, effectively becoming bankers for their clients.

Luckily our clients have generally respected our payment terms (this might have something to do with the fact that we only work with clients we trust and value), but if the squeeze continues, it's difficult to see how smaller agencies will survive in the long term.

Article originally appeared on The Naive Network (http://naivenetwork.com/).
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