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Sun 14 Feb 2010 02:42 PM

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Ad chief wants gov't intervention on late payments

Memac CEO says advertising firms' claims are being ignored by debtors in UAE.

Ad chief wants gov't intervention on late payments
CLARION CALL: Eddie Moutran, chairman and CEO of Memac Ogilvy, says the government should do more to ensure the ad industry is paid.

The regional boss of one of the world’s largest advertising firms on Sunday called on the UAE government to prioritise delayed payments to the advertising industry.

Edmond Moutran, chairman and CEO of Memac Ogilvy & Mather Holding Inc for the Middle East and North Africa – a WPP company - said during a media roundtable that advertising repayments remain a low priority to real estate debtors in the region.

“The only thing I ask for is give as much importance to me as the contractor who is building the building because he takes priority at the moment,” he said.

Advertising revenues slumped 14 percent in the Arab world last year as companies slashed their marketing budgets amid the global economic downturn.

Revenues dropped to $4.6bn in 2009 from $5.3bn the previous year as the region’s economy slowed, according to a report by Dubai Press Club and consultancy Value Partners. The biggest declines were in the real estate sector.

Although the industry is showing some signs of recovery, Moutran said delayed payments remained a problem.

“It’s not a matter of bad debts. It’s a matter of seriously delayed payments,” he said. “Banks do not historically lend money to advertising agencies because they don’t have too many assets. It’s got to start with governments.

“[If] they just nudge us up one or two places, it will solve our problems much faster than everybody else. All it takes is takes is the government to say ‘these are people who helped build the economy in the past’,” he said. “Now they [real estate clients] are talking about paying us in five years, I’d like to make it three.”

re run 9 years ago

Fight bad, embarrass them when they come to Europe, there are ways to deal with people like this. Sue in London and seize their UK assets. Fight back.

NO SYMPATHY 9 years ago

The CEO needs to quit whining and write it all off as a bad debt. This is the price of doing business in the Middle East. When times were good nobody was whining, so why now ? The secret of success here is to say stop work when you are not paid the 2nd month. Walk and don't talk.

AirMiles 9 years ago

I learned the hard way. My consultancy almost went under after many "large multi-nationals" played the "oh, we've lost your invoice, can you send it again?", and the "oh, the person who signs the cheque is on holiday, can you wait two months?", game. For the past 5 years, a 50% deposit is part of my Terms & Conditions. I lost a bunch of clients when I first introduced it, but I figure these were companies who were never going to pay me anyway! At a recent conference, an American consultant stated he knows companies looking to do business in the region double their quote - and ask for 50% up front. True or not, it's a sign of how this part of the world is perceived.

moni 9 years ago

It is all in the contract. development loan guaranties tied to previous assets.

You are joking arent you? 9 years ago

No Sympathy says: "The CEO needs to quit whining and write it all off as a bad debt." Is this what we should tell all the suppliers downlines of us? Too bad? is that what we tell our staff? Again - Too bad? You really havent thought this matter through "No sympathy". There is right and there is wrong. That is why there are laws. What is being done to SMEs is patently wrong, but there is absolutely no support being provided for those being ripped off. Think again about the snow ball effect this will have on the UAE economy. We are all sucking it up as best we can, but your attitude is down right offensive.

MeMoiAna 9 years ago

They deserve not to be paid, they made enough money with highly inflated price with no advise to the client, but spend spend spend...millions for billboard,magazines with no audit, pure vanity and show off...we can't even see the city anymore with all their visual pollution. One thing is sure, they won't get the money spent on Marketing managers to get their deals. Please Edmon Montran,we know you don't care about Muslim values, you just lobby against Islamic values, do us a favor, and take your advertising industry somewhere else (actually i can t think of many civilized country that would allow Fair and Lively ads without being sued for encouraging racism and inferiority complex among darker skinned people)..Anyway, the best advertising is no advertising.

Hans J. Weber 9 years ago

Welcome in the club. The sooner you address reality more likely you will do searious business again - elsewhere.

pradeep iyengar 9 years ago

I completely agree on the delayed payments, we surely need intervention, but is this all just about Real Estate clients, well to start with unlike in matured markets or say even emerging markets, there is a system in place through regulatory bodies ( Advertising agencies association or like minded bodies ) which stipulate clients in general to pay on time and Media is a party to this arrangement & goes all out to ensure that agencies receive payments on time ( though some delays still do happen) but atleast the parties involved are protected & get their payments, but here in the GCC ( KSA & UAE) to be more specific the payments asre delayed to agencies & simultaneous media by say more than 6 months & no one seems worried. I think its time for us ( agencies as well as media houses) to come together and start working towards putting a system in place whereby our payments period are actually defined and also ensure that the clients too pay up on time and sanctity is maintained all through...

Dan 9 years ago

According to ”NO SYMPATHY”, we should all stop paying our bills when it’s bad times. And according to him it makes sense. But his advice to stop work when not paid the 2nd month is very valid. But getting 50% upfront seems to be the most reliable one.

Jon 9 years ago

Isn't it haram to not pay your debts ?