Extension of Payment Terms for Existing and New Advertisers

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We are going through an unprecedented time with no textbook - the global pandemic is forcing us into unchartered territory.  We may be left in a recession once Covid-19 subsides (or even before) which affects every single one of us personally and professionally.

I’d like to encourage big tech companies that get compensated by advertisers like Alphabet (specifically Google), Facebook, and Amazon to have increased empathy for their customer base at this time. 

Within the industry, it’s well known that Google, Facebook, and Amazon have very strict policies around payment terms. If I was running those companies, I’d have strict payment policies as well. Collectively, they have millions of customers and need the cash flow in order to pay themselves, 3rd party publishers, and other costs of running the business.  

Between Google, Facebook, and Amazon, they have roughly $200B of cash on hand.  With the recent dip in the market and our time with Coronavirus so far, it may be a bit less right now.  There are some creative ways to leverage a small portion of that $200B to help their customers when they need it most.

While there are lots of smart people at Google, Facebook, and Amazon, I’d like to kickstart the process of thinking about how they could help their customers… a single, most useful opportunity:

Extend generous payment terms for existing and new advertising purchases

Why is this important?

There are two main reasons:

  1. Many of the businesses advertising on their platforms are closed (labeled as non-essential businesses) and therefore, not generating the amount of revenue they once were.  This means they need to trim down expenses into a healthy number that allows them to survive this time.
  2. Much of their workforce is working from home, which is creating longer lead times for accounts receivables and payables.  Getting checks approved to pay could take a materially longer time.

Many businesses would benefit from more generous payment terms from Amazon, Google, and Facebook as it relates to advertising on their platforms.  I hope that these industry-leading businesses recognize this opportunity and find ways to help businesses of all sizes and shapes.