Drinks giant Diageo has shortlisted inclumbent Dentsu Aegis’ Carat, Publicis Media and Omnicom’s PHD for its global media planning and buying account, worth an estimated $1bn. Diageo brands include Johnnie Walker, Guinness and Smirnoff.
In the pitch, like some other global reviews, it has been reported that Diageo is looking to extend its payment terms beyond its published 60 days to as much as 120, a third of a year. It admits to paying on 90 for some international projects.
Diageo won’t say what exactly it’s offering but says it will be a “win-win” deal for the lucky agency. WPP declined to pitch, Interpublic has dropped out.
Diageo says: “As we continue to be at the forefront of media planning and data-driven marketing plans we are looking for a partner who shares our ambition and can bring the right talent, expertise and creativity to our business. We always consider total commercial value when selecting an agency partner, and want this partnership to be mutually beneficial.
“Our standard payment terms are 60 days in the UK. Any longer payment terms are for large suppliers including multi-national companies which are mutually agreed on a case by case basis. Our approach is always to find a win-win for both parties, so our conversations with large, multinational suppliers cover a broad range of areas, including relationships, the product or service and the way we do business, as well as price and payment terms.”
Quite how payment on 60 days or more is a win-win for anyone but the client is beyond most people, especially for an assignment dealing with multiple brands all over the world, each with their own differing requirements.
Diageo CMO Sylvia Saller, who seems to be keeping her head down on this one, picked up a CBE in the UK’s New Year Honours List for her work encouraging diversity in suppliers, including agencies. She wants the teams on her business to include a specified number of women and minorities.
All very praiseworthy. But, in this instance, when will Diageo’s dream teams actually be paid?
This is an updated version of an earlier post.