Delayed payments add to the woes of news publishers

The advent of the Covid-19 pandemic shook up the A&M industry and everything went for a toss. Brands reduced spending on advertising, salaries were reduced, platforms and agencies had to work for half the rates and thousands of people were sacked across the board.

Now with pandemic-induced challenges settling down, the Indian adex growing, offices re-opening, new brand launches, an increased number of ads across platforms, and markets opening up, it’s now safe to say that business has returned to the usual for most in the advertising and marketing industry. But print and digital news publishers still continue to struggle to meet the day-to-day cash flow cycle with payments not coming in time. 

A top news publisher told BestMediaInfo.com that among the several other challenges that are obstructing the way for business to resume, as usual, one of the biggest they are facing is payments not being made in time. He said, “The business has started flowing in. Hardly, do our inventories go vacant. But the problem that arose during the Covid-19 period related to delayed payments remains the same. Earlier, we understood that everything has gone haywire, but now it’s high time that we too start getting payments in time. We also appeal to agencies and brands to clear our pending dues.”

In fact, BestMediaInfo.com came to know that INS (Indian Newspaper Society) has issued notices of “disaccreditation” to a number of advertising agencies for long-pending dues owed to publishers, according to sources.

Another expert in the news publishing business alleged that while the payments for physical print spaces are coming in on time, payments for digital ad space are getting delayed.

The print industry is already going through a tough phase. The global shortages, because of the ongoing Russia-Ukraine war and the lockdown in Shanghai, have almost frozen the supply chains of the newsprint. Not only is there a shortage of printing paper but also a looming coal shortage which might have an impact on domestic production. Therefore, extremely delayed payments and non-payment issues are only adding to the woes.

According to experts, because the digital space is not regulated people can take advantage of the grey area. On the other hand, agencies allege that they are not getting compensated by brands on time and this is what disrupts the entire cycle.

Experts suggest that publishers like Google and Facebook, who are foreign players, have strict measures in place for defaulters, this is what is needed for India to regulate payments and keep the cash flow going in the industry.

Shradha Agarwal

Explaining an agency’s point of view, Shradha Agarwal, CEO and Co-Founder of Grapes, stated, “We had to pay dues from our pockets for one of our clients who did not pay the last outstanding bill and are still fighting with them. We hardly make any profit and then we have to pay the publishers. We also have to see that we pay salaries. Another problem is that agencies first make the payment to Facebook and Google because they won’t run your ads unless they get it. The cash flow even if it is coming in, it goes to them.”

"In certain cases where the bill has gone beyond 90 days, I can still manage cash flow of Rs 2-3 crores from here and there. But how will I fudge a bill of Rs 30 crores?” she added.

“The sales teams of publishers pick the campaigns up to meet the targets. Even though we are saying there are 30% spends happening on digital, it is still not streamlined. When rules are not in place, everyone is taking advantage of it,” she elaborated.

Krishnarao Buddha

Krishnarao Buddha, Senior Category Head- Marketing, Parle Products, stated that digital payments depend upon the terms and conditions between the three parties that are, the agency, the platform and the advertiser. “That is true for any business, if the terms have not been decided properly anyone can suffer.”

Another point to note is that in India the IAMAI (Internet and Mobile Association of India) works with AAAI (Advertising Agencies Association of India) to establish an indigenous credit recovery mechanism for the sector, However, they are not government bodies and until now many agencies are not a part of such bodies and cannot be regulated.

A leading FMCG advertiser on the other hand explained that very rarely does an advertiser purposely put a billing cycle on standby. “Ultimately everyone wants their ads to run, in my knowledge, it is impossible to continue with ads if the bill is overdue.”

Info@BestMediaInfo.com