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Agencies Sweat As Clients Look Less Liquid

When the share price of a top marketer such as General Motors plummets 31%, as it did last week, media sellers and media agencies brace for fallout that could leave them holding the bag for millions of media time. GM's Mark McNabb says no media outlet has asked GM to switch to cash-up-front status yet, but agencies and media sellers are still doing what they can to limit their liability and avoid cancellations.

Look for the first real impact to come in early 2009 among financial, automotive, retail and travel marketers. "The first quarter will be really scary," especially for TV, says a media agency insider.

Media buying agencies are actively taking steps to avoid getting stuck with huge bills, including being more vigilant about accounts receivable. "We are looking at accounts that are overdue, and it's not just a finance person calling them; now the CEO will call them up," says one executive.

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