Giant ad agency GroupM — it counts companies Nike, Unilever and Sony as clients — says it will only do business with Web publishers if they agree to wait as long as 180 days to receive payment for serving GroupM ads. The industry norm is payment within 60 days.
One Web publisher we know, who spoke anonymously so as to stay on the agency’s good side, says Web GroupM’s demands are “outrageous” — especially since many Web publishers rely on already slow-moving rep firms. “At that rate we won’t get paid till next year,” said this publisher.
Ad network Blogads, which alerted us to GroupM’s demands on its own company blog, goes over the ramifications:
First, high overhead publishers who are already cash-flow thin will be stretched beyond the breaking point. Second Group M wants a licence to sit on cash owed to publishers for 90 days before paying it out. (Group M, which calls itself “the leading global investment management operation,” seems also to be managing its own cash flow very aggressively.)
Here are GroupM’s new terms:
No invoice shall be sent by Media Company until on or after 30 days from the media start date, and payment shall be effected 60 days from receipt of the applicable Media Company’s invoice. … Media Company may notify Agency that it has not received payment in accordance with the foregoing provisions and whether it intends to seek payment directly from Advertiser pursuant to Section III(c), and may do so no sooner than 90 days after providing such notice to Agency.