Media, Shops Wait For Pay From GM, Bud
Advertising Age, Monday, February 23, 2009 10:02 AM
General Motors and Anheuser-Busch InBev, maker of Budweiser, are among major marketers asking ad and media outlets to wait as long as 120 days to be paid for production costs and media outlays. Many firms and trade groups say the massive companies are essentially bullying their media and advertising vendors into making them no-interest loans.
In early February, A-B told all its TV, radio, cable and other media-outlet partners that it would be taking 120 days to fill invoices going forward. It previously paid bills every 30 days. "They're using the interest on that float to pay down their own loans," say Mary Collins, CEO of the Media Financial Management Association, an association of media outlets.
Cash-strapped GM recently shifted to a 70-day payment model, which has inspired vitriol from ad producers. They are required by labor law to pay their own crews within 10 days. "As a small agency, we can't [afford to] float the giant companies we are working for," says Mike Liebowitz, CEO of agency Big Spaceship.
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In early February, A-B told all its TV, radio, cable and other media-outlet partners that it would be taking 120 days to fill invoices going forward. It previously paid bills every 30 days. "They're using the interest on that float to pay down their own loans," say Mary Collins, CEO of the Media Financial Management Association, an association of media outlets.
Cash-strapped GM recently shifted to a 70-day payment model, which has inspired vitriol from ad producers. They are required by labor law to pay their own crews within 10 days. "As a small agency, we can't [afford to] float the giant companies we are working for," says Mike Liebowitz, CEO of agency Big Spaceship.
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