Brouhaha brews in world of advertising
EmptyAd sales execs are defying an Anheuser-Busch InBev directive that would have them wait as many as 120 days to be reimbursed for airtime, telling the brewing giant to stick its ultimatum where the zon don't schijnen.
Sources said all major broadcast and cable nets have condemned A-B InBev's unilateral order, refusing to comply with what one sales exec called "a shakedown." The brewer has not responded to the opposition, which began fermenting Feb. 5 after A-B InBev sent its media suppliers a letter spelling out the new payment schedule.
The industry standard is 30 days.
The Belgium-based company's profit plummeted 95% during the fourth quarter as the world's largest brewer paid debt-financing costs related to its $52 billion takeover of A-B in St. Louis.
Last month, London-based Diageo — the holding company behind such brands as Guinness, Smirnoff and Johnnie Walker — began informing suppliers it would push back payments to 60 days.
"We're not going to change our policy for one client because if we let A-B get away with this, everyone's going to want to push their payments back," one ad sales boss said. "I'd lose more money by agreeing to this than I would if I cut my price."
Anthony Crupi is senior editor at Mediaweek.