Re: UKNM: RE: ...Ad Agencies

[bryan_jago]

Can't really speak for any other Agencies but, as a Global Company Policy,

Carat cannot book any advertising for a client unless we have Credit Cover

(From Trade Indemnity) or Pre-Payment for the space.


Given that most Dotcoms don't have any trading history, getting Credit

Cover is nigh on impossible.  As a result, we have to ask all dotcoms to

pre-pay.  Escrow is one of the options however, I know our Finance Dept

hate them!  Basically, because they still have to chase the client to get

them to counter sign the cheque/transfer order.  Also, there is, I believe,

some ambiguity as to who the account belongs to in the unlikely event that

they client should go bankrupt!


The favoured alternative is a contract between ourselves and our client

that they pre-pay lumps sums but that all interest gained on that sum

whilst it is sitting in our bank account is paid to the client.  Works

well, since the client gets all the interest (which is at a very healthy

level) and we know that we have the cash to pay the Media Owners when they

invoice us without having to chase the client!!  All clients have to

sign-off schedules/bookings so they know exactly what is being bought and a

monthly statement of the account is provided.


Biggest problem with all this is the fact that it's a *nasty* money

discussion and in effect the client is being told that they are not Credit

Worthy..........does wonders for the ego that!


Bryan

Tim [dot] Hayward@jwt [dot] comchinwag [dot] com

 on 12/05/2000 10:24:06


Please respond to

uk-netmarketingchinwag [dot] com

Sent by:

ownerchinwag [dot] com

Subject:  Re: UKNM: RE: ...Ad Agencies


I know of a few agencies (ad, mktg and PR) that say they're getting away

with

charging startups 100% up front. Somehow I'm not sure that's true. I'm also

not

sure its that healthy. Nobody should really be paying in advance for

largely

intangible services (A debate I've recently had - fruitlessly - with my

lawyer).


We're looking at a new model of asking for 100% to be placed in escrow

until

an

agreed delivery point. What does anyone think of this?


T



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