Nielsen Tells Suppliers They Must Wait 75 Days for Payments

(MoneyWatch)  The recession may have arrived at Nielsen, the giant audience measurement and marketing research company that feeds the ad industry the numbers it needs to survive.

The company sent a letter to all its global suppliers telling them they were adopting a new payment schedule. Suppliers can either wait 75 days for their money, or get it in 15 days at a 3 percent discount, according to a copy of the letter obtained by BNET. Nielsen previously paid many of its suppliers within 30 days.

The company also wants all of its suppliers to sign up for electronic payment -- a move that will save it check processing costs.

Delaying payments helps large companies during tough times because it allows them to hold onto cash in interest-bearing accounts for longer periods.

Nielsen is not the only company trying to delay payments. Omnicom recently told commercial TV producers in the U.S. and U.K. that they would have to wait until the client paid the agency before the agency paid the producer. That policy was reversed in the U.K. after protests; it still stands in the U.S. at the time of writing. Anheuser-Busch/InBev has pushed its payment schedule to 120 days.

Nielsen's move is interesting because in some of its businesses, such as TV audience measurement, it operates as a virtual monopoly and therefore should enjoy some price leverage with its customers. But the move to squeeze suppliers by making them wait suggests the company is in a cash crunch.

• See BNET's previous coverage of advertising payment schedule changes:
• Omnicom, in Cash Crunch, to Delay Payments to U.S. TV Producers
• Omnicom Sought to Delay TV Production Payments; a Sign of Cash Crisis?
• Clients Are Delaying Payments to Agencies

Disclosure: The author is a former employee and freelancer for one of Nielsen's publishing groups.