Soapbox 2025: “Payment Terms in Our World Need an Update,” says Tinygiant
Above (left to right): Sara Eolin and Veronica Diaferia, co-founders of Tinygiant
Our LBB community is buzzing with ideas, opinions and visions for a better advertising industry. So this year, we invited you to dig out your megaphone and climb onto our figurative soapbox to share your hopes for 2025: what change do you want to see? How can the inner workings of the industry improve? How should it adapt to the tech, social, cultural, economic, and politics shifts shaping the market?
Taking the mic this time are Veronica Diaferia and Sara Eolin, co-founders of Tinygiant, a women-owned production company. They examine the critical issue of outdated payment practices in the advertising and production industry, speaking directly to the challenges small businesses – especially women-owned enterprises – face as they navigate an increasingly dynamic market.
Payment Terms in Our World Need an Update for 2025
“Big Firms Are Quick To Collect, Slow to Pay” boasted The Wall Street Journal. Reuters agreed with this headline, “Why America’s small businesses are becoming like banks", highlighting how Fortune 500 businesses were taking advantage of their smaller counterparts to save on cash free of interest or penalties. These articles are from 2009 and 2010 – a lifetime ago, when Obama was a young President, the swine flu was the most terrifying pandemic and Avatar was the hit movie of the year. Did things get better in the getting paid department? Take a wild guess! Like anything, by 2025, it’s gotten worse, and it seems late payments or straight up unfavourable payment terms have become the norm.
90 day payment terms are now upon us. 120+ days? Very popular if you work direct to client with a S&P 500 company. The answer to bitching and moaning about it? Just get a loan. Any small business owner knows just how quick and easy that process is, right?? Why is this widely accepted in the industry? When you go to a restaurant, do you pay for the items on the menu four months later? Why, as business owners who foster creative talent and keep the film community employed, do we need to take out loans to produce a job we won fair and square during a formal bidding process?
As a small business, every bill we have is due within 30 days or less, from payroll to Amex, from office rent to insurance and everything in between. Legally we owe payment to our employees and crews within two weeks of their first workday. How does one reconcile it with these new client-friendly payment terms that put production companies out of business?
We accept that all businesses want to make money. As business owners, we are happy to disclose it’s a main goal of ours as well. We believe in hard work, understanding the marketplace, and responding to our clients’ needs with efficiency and a superior product. At Tinygiant, that product would be a compelling ad that in turn makes more money for our client for a tremendous ROI. Big or small, that’s what we do – and countless others in the advertising production space do it too. We have amazing competition and through that, have built a tight knit community and excellence for our clients. What’s the other thing we all have in common? We’re always chasing down our invoices. We’re stressing our bank balance while staring at an open receivables report that shows we should be flush with cash. Except we’re not, because another company with profits in the billions is withholding it to make more interest on the money they owe us. It especially hurts to not get paid when you see that ad on air. They’re making money off the product we made, that we have yet to be paid for. How is that acceptable? Which service is delivered to your door unless you pay for such delivery first or, let’s say, by the time it gets DELIVERED?
These 90+ payment term practices make the industry and the final products worse. The funny thing is that in turn this makes clients less money. Most production companies are small businesses – the speed and pace of production needs a small and nimble company. For example, we need to pay for locations immediately. Like, little Grandma Evelyn who has the only Cape Cod house on the block with the perfect fence and placement for the sun. Perfect, let’s secure it. Imagine then asking her to sign up to different portals to make an invoice, track the PO, have a background check… We’d be in pre-production for months or most likely, Grandma would tell us to take a hike.
Production makes magic. We find the needle in the haystack. Often our leverage to getting things done at the speed of light with amazing yet obscure places, people and things, is that we’ll pay them right now. That’s our leverage. Pure and simple. When we are handcuffed to do so, we get a lot of nos. That doesn’t make Big Company’s ad any better. It lowers the ROI on the spot… so that interest you made is nice, but your VALUE is sinking – which is worth a lot more.
Who are the production companies that can handle this financial stress? Honestly, none of them. Perhaps some legacy companies have a bit more tolerance for it, but I doubt it. These terms hurt the companies that are owned by diverse and underrepresented communities the most. With the end of DEI initiatives, if corporate America wants to make a difference outside of hiring practices, let’s talk about this radical idea: pay us for the work we do when we do it. It’s not a risk or a favour to use these companies. It’s a clear benefit as we understand your consumer who looks like us and has lived experience like us.
It is entirely possible to pay production companies 75% upon award of the job and 25% within 30 days of completion. We know it’s possible because you know who pays like this? Other small companies. Independent agencies. Start-ups. The smaller the company the more dedicated they are to making sure their vendors are paid. How about a new golden rule? Pay others how you’d want to be paid. It catapults your business, and we’re worth it.
