Agencies hail client payment victory

Major agency networks have mounted a successful fightback against client plans to extend payment terms to nearly six months, forcing the likes of Mondelez into a major rethink.
According to press reports, the large networks have resisted the changes, with some even threatening to turn away new business where companies were insisting on more time to pay their bills.
The issue first emerged in May, when Mondelez  – the company behind brands such as Cadbury, Oreo, Ritz and Kenco – said it would be extending its payment terms to 120 days. It had followed Procter & Gamble, Johnson & Johnson and Anheuser-Busch InBev all pushing back payments from 45 days to 75 days.
In the UK, client trade ISBA hit back at claims its members were riding roughshod over agencies and suppliers, saying they were working hard to ensure firms got paid regularly, while both the Marketing Agencies Association and the IPA were heavily critical of the changes.
Now Omnicom chief executive John Wren (pictured) has told the Financial Times: “We’ve turned down and not accepted clients that we could have won because we weren’t prepared to accept the terms they were offering.
“We’re not a bank. I think if you speak to my competitors, all three agree with that concept that’s not what we’re here for. And anybody who wants to treat us like a bank can go to a bank.”
Meanwhile, Publicis and Interpublic have both stated they had refused to change their arrangements, with Interpublic boss Michal Roth adding: “Frankly, they shouldn’t be looking to us to do their financing and we have not seen a major impact on our business model.”

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