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Dentsu To Limit Payment Terms To 30 Days For Minority Owned Media.

Minority-owned media groups are using words like “game changer” and “changemaker” to herald a decision by ad agency giant dentsu to update payment terms to 30-days for all of its minority-owned media partners in the U.S. The shop says it was inspired to shift from the industry standard payment terms of 60, and up to 120 days, by General Motors, which was the first to offer updated payment terms earlier this spring.

Minority-owned media operators say having to wait two to four months to get paid for advertising has put an enormous strain on their business operation and cash flow, especially among smaller companies during the past year. It has hurt both their ability to continue day-to-day operations and hampered efforts to expand and secure additional funding, they say.

“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,” Jacki Kelley, CEO of dentsu Americas, said in a statement. “Lifting the burden of having to carry production costs is a key enabler to create equity in media.”

Dentsu’s media agencies include Carat, iProspect, Dentsu X and 360i. In addition to General Motors, dentsu also counts radio’s biggest advertiser Procter & Gamble, along with Microsoft, Mastercard, Pfizer and Kroger, among its clients.

Effective with the start of the new broadcast year on Oct. 1, dentsu says that once a correct invoice has been received in the U.S., its teams will ensure any discrepancies are reconciled and cleared for payment by the 30-day mark. The agency group says it will provide a simple web-based form for minority-owned media partners to fill out designating their type of ownership and supplying verification.

The change is being spearheaded by Mark Prince, the agency’s Senior VP and Head of Economic Empowerment, who says he’s seen first-hand the struggles minority-owned media owners face in receiving timely payments. “As we push Economic Empowerment, it was important to quickly develop a strong response from the start that tackles the urgent need to address the basic barriers our partners deal with in this space,” Prince said.

The move is receiving a veritable standing ovation from minority owners across the media ecosystem. Raul Alarcon, Jr., CEO and Chairman of Spanish Broadcasting System, said the new policy signals “a new chapter in history” for minority-owned media companies. “This offering 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,” Alarcon said in press materials provided by dentsu.

Chesley Maddox-Dorsey, CEO of American Urban Radio Networks and Superadio, called the move “game-changing,” saying it shows “our business is valued as well as our financial success in the competitive business. With this strategic decision, dentsu removes a crucial financial barrier leading the way for their clients to do more business with minority-owned media companies based on an authentic connection with the target audience and not solely market capitalization or access to financial markets,” Maddox-Dorsey said.

Jim Winston, President of the National Association of Black Owned Broadcasters, said he hopes the new policy will spur other agencies and advertisers to take similar action. “This announcement is just one of many initiatives that dentsu has undertaken to provide leadership in the support of Black and other minority owned media,” Winston said. “NABOB is grateful for dentsu’s leadership.

The announcement is part of dentsu’s Economic Empowerment initiative, a new standalone division led by Prince announced in May that includes consulting services to help drive systemic change in how brands make media-buying decisions. In February, dentsu teamed up with One Solution, the branded solution division of Urban One, to launch “More Than That with Gia Peppers” an audio series created for Black audiences and distributed exclusively by Black-owned media outlets, including the Spotset NABOB Radio Network, Urban One, and American Urban Radio Networks.

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