Media companies get tough on delinquent advertising agencies
JAMAICA'S media companies are getting tough on delinquent advertising agencies and have threatened to impose sanctions if there is no compliance.
The Media Association of Jamaica (MAJ) — the umbrella group for the nation's newspapers, radio and television stations — said in a release yesterday that advertising agencies in breach of payment guidelines have until May 15, 2014 to conform or face sanctions, including the reduction or removal of commission paid for placements, which would affect clients' future advertising placements through the offending agencies.
Said the MAJ: "Under the terms of the long-standing Agreement for Accreditation of Advertising Agencies, media invoices, timely submitted, are due and payable in full, within 25 days of the 10th day of the month after the media houses' services are performed. Further, agencies are obliged to prove they have necessary liquidity to honour their commitments on time, whether or not they have been paid by their clients."
The MAJ said it has been engaged in discussions with the Advertising Agencies Association of Jamaica about ways to improve the payment performance of advertising agencies as media entities have been experiencing difficulty in collecting on time sums owed for advertising agency placements.
Agencies act as brokers between advertisers and media companies by providing creative work and placement services for their clients.
"We appreciate that late payment from the client seriously constrains the agencies' ability to keep this commitment, and have discussed ways to assist, but, ultimately, it is the agencies' responsibility to ensure the media houses get paid on time," MAJ Chairman Christopher Barnes was quoted in yesterday's release.
"In the current economic environment, businesses are forced to pay more keen attention to their collections in order to survive. Media companies already operate on tight margins, so late payments and non-collection on invoices are understandably having calamitous implications. The MAJ has therefore been left with no option but to insist on full compliance with the established, mutually agreed credit terms," said Barnes.