On Thursday (8/12), global advertising company dentsu announced that it has adopted a new policy in which it will pay all minority-owned media within 30 days.
This includes Black-owned radio and television stations, and is a decision that the National Association of Black Owned Broadcasters (NABOB) calls “a game-changing commitment.”
As first reported by Streamline Publishing’s Radio Ink, dentsu has updated its payment terms by eliminating the typical industry payment terms of net60 and net120, which continue to strain minority-owned media companies, in particular smaller ones.
“The stress that delayed payments place on cash flow affects both the ability to continue day-to-day operations as well as limiting the ability to expand and secure additional funding,” dentsu’s announcement stated. “By implementing 30-day payment terms, dentsu will provide a more impactful way to engage, support, and expand minority-owned media partners in the media ecosystem, and truly enable economic empowerment.”
The net30 rule is effective Oct. 1 for dentsu’s U.S.-based clients aligned with the new broadcast calendar.
Among the dentsu agencies is Carat, perhaps the top media shop in the world. It is also the parent of creative shop dentsu mcgarrybowen. The client roster includes General Motors, which made a similar adjustment on payment terms in Spring 2021. In fact, dentsu Americas CEO Jacki Kelley says GM “was our inspiration after they pioneered this concept … Updating our payment terms for minority-owned business partners will enable them to more easily access capital, create more content, offer more programming opportunities and propel the cycle of growth. Lifting the burden of having to carry production costs is a key enabler to create equity in media.”
For Jim Winston, NABOB’s President, the announcement by Dentsu “is huge. If we can get other agencies and advertisers on board, it will be a major game-changer for minority owned broadcasters across the country.”
Chesley Maddox Dorsey, CEO of A Wonder Media/AURN, added, “Requiring our companies to underwrite receivables for 120 days-plus for multi-billion-dollar companies puts a financial strain on our companies, and it limits our ability to grow. This frees up our capital so that we can expand and grow.”
SBS CEO Raul Alarcon told Radio Ink that dentsu’s newly adopted policy to implement 30-day payment terms “is an unprecedented showing of support and solidarity to minority-owned media, and I feel this is the beginning of a new era of respect, understanding, and cooperation between the advertising community and minority media owners throughout the country.”
