It seems like marketing leaders who ignore the impact of delayed payments to agencies are inadvertently risking their brand's agility and reputation in competitive markets.
The recent MediaPost report on delayed payments to agencies by Laurie Sullivan, highlighted some disappointing trends. Her research reminded me how essential cash flow is to maintaining momentum Many overlook this aspect, assuming that as long as campaigns run, the fiscal details can wait. This is a dangerous assumption.
A case in point occurred with a CPG company that Provalytics has been working with. They used to delay payments, thinking agencies could "wait it out" while they focused on immediate sales spikes. Over time, this eroded agency trust and responsiveness ... we could absolutely see it in the creative.
A turnaround happened when they revised payment schedules, ensuring agencies got paid promptly. This change led to more agile campaign adjustments, directly impacting their market penetration and responsiveness. We certainly felt more respected and were happy to jump on any new initiative the moment it was shared with us.
The default assumption by procurement and accounts payable is that delaying payments is a cost-saving measure.
However, I witnessed firsthand that a shift to timely payments actually enhances operational efficiency across multiple suppliers. Agencies will definitely work faster and with more creativity when they're not burdened by financial uncertainty.
For Laurie's excellent analysis please look here:
https://www.mediapost.com/publications/article/415441/payments-to-agencies-freelancers-increasingly-del.html
Cheers
Todd