I may get in trouble for this opinion, but… so be it.
This week’s AdAge features an editorial, “InBev abusing agencies with its payment terms,” written by the president of an advertising agency in the Midwest.
InBev is the Belgian company that bought Anheuser-Busch. The brewer is notoriously cheap and frowns on pricey marketing and advertising, both of which had been a highly visible of A-B’s strategy for decades.
The editorial points to numerous cost reductions and policy changes that InBev seems to have implemented after the purchase. The author mentions a couple internal corporate changes, such as the replacement of offices with bullpens and the elimination of first-class travel and baseball tickets. There’s a snarky retort after each mention including, “So what?” and “Hey, times are tough.” So much for this agency executive’s public expression of empathy for (or any effort to protect the privacy of) InBev/A-B employees.
He’s far clearer in his disdain for the company’s treatment of external partners.
“The company has gone one step too far” by announcing that it would now take up to 120 days to pay its bills - a “horrible precedent.” After InBev’s CEO says (in an unrelated WSJ interview) that he’s going to run the company on a tight leash, our author quips “… that’s true of any company, but we all still need to pay our bills.” Oh, snap! He grinds on, quoting a Morningstar analyst as describing the InBev team as “ruthless” “machete-wielding investment bankers.”
Finally, the writer crows that the Belgian government may soon examine the new policy to determine whether it is an abuse of power.* I suppose he throws this in to point out that others (a whole government!) see what he sees.
And here’s where I may get in trouble.
I’ve been an executive for 20 years. I value and am grateful for my relationships with the agencies that have made me look good and helped grow my brands. There are many in the agency business whom I consider friends. But there are some fundamental, DNA-level business principles and tenets that are not negotiable. Discretion is on the top of the list.
If the Belgian government instructs InBev to reverse the policy, great. If I worked at InBev and one of my agencies was hurt by this new policy, I would take up its cause with my superiors and encourage the agency to privately protest and/or resign.
And if that agency went to the press to air private and confidential matters such as billing and payment policies, I’d dismiss them on the spot.
This is such an unholy, obnoxious breach I wouldn’t think twice. An agency executive who takes a business matter to the media cannot be trusted with a private conversation, negotiation or anything else. You do this and you’re done. At least in my backyard.
What purpose did this agency president believe his editorial would serve? Is he an InBev agency or did he simply decide to speak out on behalf of his trade? ‘Doesn’t really matter. Could anyone believe, particularly in this economy, that he could or should pressure a global company by throwing a temper tantrum in public?
I’m tempted to tell him, “Hey, times are tough” (where have we heard that before?), but the policy may in fact be unreasonable. It would be unjust for a small agency to suffer or even go out of business because InBev wants to make money on the float. Not my point; I plead no contest. But an agency leader who takes private business and/or contractual matters out into the public forum should perhaps consider a different line of work because - in the increasingly fragile, trust-based business of advertising - I wouldn’t trust this guy to pull out my chair at dinner.
* Update: the Belgian government has dropped its probe, determining that InBev’s new payment policy does not violate any antitrust regulations.