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Omnicom Passes the Buck on Advertising Payments


In March, New York-based Omnicom Group began enforcing the sequential liability clause in advertising contracts, asserting that ad agencies will no longer be responsible for paying production fees until the client has paid for the services.

Reportedly, these new company guidelines are the result of the requests for longer payment times from major advertisers, such as General Motors, which has asked for 75 days to pay invoices, and beverage giant InBev, which has requested at least 120 days to settle its accounts.
While Omnicom has instigated this plan to help protect itself from unpaid bills, several artist trade groups complain that it is unjust to pass the financial burden to artists, who are the least prepared to bear it.

To help protect artists from having to absorb the costs of ad production themselves, trade groups such as the American Society of Media Photographers recommend that artists include clauses in their contracts clearly stipulating that no copyright licenses will be issued until payments are complete.

At press time, no other advertising firms, such as the Interpublic Group of Companies, WPP Group or Publicis Groupe, had reported that they would be enforcing sequential liability clauses in their contracts.

Omnicom is the owner of many large creative agencies, including three of the top 10 international advertising firms: BBDO, DDB and TBWA Worldwide. Omnicom is the first firm to establish this stricter policy and will be enforcing it across all of its agencies.