Survival of Nigeria’s marketing communication industry threatened

…As clients’ prolong payment period on contracts

Many of the operating agencies, from Outdoor, Creative to Public Relations businesses in Nigeria’s over N150 billion marketing

communication industry are complaining but not stridently over the poor payment attitude of their clients.

Both local and multinational companies who contract the agencies for professional media businesses have in the recent time extended period of payment to these agencies from 30 days to 90 days to 180 days (6 months) and sometimes 10 months.

“While the agencies and the media were believed to have fulfilled their own part of the contractual agreement by executing the contracts, they are now faced with the challenge of getting the clients honour their own part of the bargain by paying the invoices that have over -stayed agreed working grace period of 45 days”, an analyst said recently. This can be described as being against ethical standard.

This is obviously negatively impacting the operations of the agencies, especially when it is considered that the agencies borrow money from banks and other financial institutions as high as 25 per cent interest rate to finance the given contracts from clients.

What these companies in various sectors are doing is to use our capital to finance their marketing businesses instead of going to the banks themselves to borrow money, one of the worried operators told Businessday in Lagos.

“Many of us owe salaries, it is threatening our business and this clients’ attitude is gradually forcing some agencies to head southwards”, he said.