ANA Study Reveals Payment Terms for Marketing Services Have Been Extended

Term Changes Have Pressured Suppliers and Vendors

NEW YORK – December 2, 2013 – A new ANA (Association of National Advertisers) study entitled, “Payment Terms – Current Practices for Marketing Services,” reveals that 43 percent of marketers have extended payment terms this year on at least one marketing service in their portfolio. That portfolio includes agency fees, research, media, production, and talent payments.

Key study highlights include:

  • 17 percent of marketers have shortened terms on at least one marketing service
  • Across the multitude of marketing services in their companies, 90 percent of marketers have left at least some payment terms unchanged
  • Looking to 2014, 42 percent of respondents said they were somewhat or very likely to change payment terms.

A substantial majority who extended terms have done so with the primary objective of improving corporate cash flow. Those changes came with implications:

  • Strained vendor relationships (57 percent)
  • Higher prices (25 percent)
  • Strained management processes (23 percent)

Among those companies that instituted payment terms changes, about 60 percent did so for company suppliers across the board – and not just those in the advertising and media space. Forty percent implemented changes to just a segment of their supplier base.

The two primary drivers of payment term changes are:

  • The Finance department and / or CFO (86 percent)  
  • Procurement and purchasing (52 percent).

“It is becoming very clear that payment terms are becoming increasingly important to the overall marketer / supplier relationship. Such considerations must now be integrated into the total compensation equation,” said Bob Liodice, President and CEO of ANA. “While the ANA does not recommend any specific term or practice, we do advocate better collaboration that advances the quality of the marketer / supplier relationship and the products and services delivered.”

This current study was conducted to determine whether recent headlines about term extensions were isolated or reflective of broader adoption in the industry. Ninety-eight client side marketers participated, with 62 percent of these being from procurement/sourcing departments. Respondents averaged 14 years of experience in advertising and marketing. Survey questions about “the past year” reflect a snapshot time-period between May 1, 2012 and April 30, 2013. Full results are available upon request.

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About the ANA

The mission of the ANA (Association of National Advertisers) is to drive growth for marketing professionals, brands and businesses, the industry, and humanity. The ANA serves the marketing needs of 20,000 brands by leveraging the 12-point ANA Growth Agenda, which has been endorsed by the Global CMO Growth Council. The ANA’s membership consists of U.S. and international companies, including client-side marketers, nonprofits, fundraisers, and marketing solutions providers (data science and technology companies, ad agencies, publishers, media companies, suppliers, and vendors). The ANA creates Marketing Growth Champions by serving, educating, and advocating for more than 50,000 industry members that collectively invest more than $400 billion in marketing and advertising annually.

Press Contacts:
Marcus Hardy
CooperKatz & Co. for the ANA
mhardy@cooperkatz.com
917-595-3043

Danielle Arnold
CooperKatz & Co. for the ANA
darnold@cooperkatz.com
917-595-3062