Recently, both
P&G as well as Mondelez announced they were seeking significant increases on the payment terms they require from their media agencies. Mondelez International is going the way of AB-InBev with 120 days payments terms, while P&G are going with 75 days. This means advertisers are asking their media agencies to bankroll the advertiser’s media costs and fees for a longer period of time (up to 120 days).
Advertisers need to be realistic in terms of what the consequences could be. And then decide if these consequences are not worse than the actual benefit of these “enhanced” payment terms.
Note: a few of the paragraphs that follow were written by me for the book “Z.E.R.O., zero paid media as the new marketing model” (with co-author Joseph Jaffe). Z.E.R.O. is on
pre-order on Kickstarter through June 26, 2013. If you haven’t pre-ordered yet, and it isn’t June 26 yet, then you still have time.