“This is not just a commercial issue; it is a matter of fairness and responsibility,” the association said through its President Tan Kien Eng.

The statement struck a nerve — and not just in Malaysia. Across Southeast Asia, agency leaders have long navigated the same tension: delivering work on time while chasing payments that arrive anything but. For many, especially smaller independents, it’s less an inconvenience than an existential pressure point.

But is Malaysia an outlier — or simply the first to say out loud what the rest of Southeast Asia’s advertising industry has long felt?

For our latest feature under our Inner State series, we recently spoke with Anish Daryani, Founder, President Director and CEO at Moonfolks and President Director at Havas Moonfolks; Pradhana H. S., Chief Executive Officer at Volare Advertising Network; Yollie Viola, Finance Head at GIGIL; and Jeanne Go-Mendoza, Chief Financial Officer at Propel Manila, as their perspectives shed light on an issue that many say has quietly shaped the way agencies operate, survive, and grow across the region.

A regional problem

The consensus among the industry leaders is that this challenge is far from isolated. 

Volare’s Pradhana confirmed that longer cycles are a familiar reality in his market in Indonesia. 

“In recent years, some payment cycles have become longer than traditional 30-day terms, particularly within larger organisations that operate with more complex procurement and approval structures,” he said. “It is an industry dynamic that requires constructive attention to ensure long-term sustainability across the ecosystem.”

Meanwhile, Anish Daryani of Havas Moonfolks was careful to draw a distinction that often gets collapsed in the broader conversation. 

“Extended payment terms and payment delays are two separate issues altogether,” he said. In his experience, most clients in Indonesia are reasonably disciplined — paying as per the terms of payment (TOP) agreed in the contract — but the existence of extended TOPs in the first place still puts pressure on agencies to make a judgment call before they sign. 

“It is up to the agency to decide whether they can afford such high credit periods from the client, before they sign on the client,” he noted.

Propel Manila’s Jeanne affirmed that the strain is felt in the Philippines as well. “Longer cycles do tie up working capital and that’s a shared pressure for agencies across the region, ours included,” she said — though she was quick to add that the conversation needs to go deeper than the headline issue.

The operational reality for agencies

Whatever the cause, the downstream effects are consistent. Cash flow tightens, vendor relationships strain, and the pressure ripples outward well beyond the agency itself.

“Cash is the lifeblood of any business,” Daryani said. “Extended payment terms can put stress on an agency’s cashflow. It also affects vendor partners — production, tech, and others. It just doesn’t affect agencies, but the entire ecosystem.”

Pradhana echoed this, framing it in terms of the people-first nature of the business. 

“Extended payment cycles require agencies to manage cash flow and operational planning more carefully, especially for campaigns involving upfront commitments to media partners, production vendors, technology platforms, and talent resources,” he said. 

“As agencies are fundamentally people-driven businesses, maintaining healthy financial cycles supports continued investment in innovation, capability development, and service excellence for clients,” he added.

Jeanne offered a more granular view of where the operational pain actually originates. In her experience, the problem isn’t always a client refusing to pay — it’s that the administrative machinery surrounding payment is broken. 

“Approval and compliance processes have grown more layered on both sides — POs, service agreements, completion sign-offs — and the payment clock effectively starts much earlier in that chain than the invoice date suggests,” she said. The result: agencies absorb weeks, sometimes months, of invisible delay before a payment term even begins to count down.

How agencies are responding

Rather than waiting for the industry to self-correct, several agencies have built internal processes designed to reduce their exposure before payment delays become a crisis.

At GIGIL in the Philippines, Yollie points to vigilance at every stage of the billing cycle as the cornerstone of their approach. 

Key practices include sending invoices to clients within 24 hours of completion, conducting regular follow-ups on outstanding payments, and immediately looping in the accounts team once an invoice exceeds its agreed credit term. 

“Consistency in follow-ups is critical,” Viola said. “Delays are easier to address when they are managed proactively rather than reactively.”

GIGIL’s approach also emphasises a clean separation of responsibilities between finance and accounts — with finance managing collections and payment follow-through, while accounts maintains the client relationship and keeps conversations focused on partnership rather than transactions. 

“Regular, honest, and open communication builds trust with our clients,” Viola added. “This trust allows us to maintain strong relationships while also being firm and consistent in managing collections and payment timelines.”

At Moonfolks, discipline begins even earlier — at the client selection stage. “We get market intelligence before signing on a client and wouldn’t take on a client that has demonstrated poor credit history in the past,” Daryani said. “We have low tolerance for payment delays. If we have a client that is consistent with payment delays, we are not afraid to take hard calls.”

For Volare, the answer lies in financial governance and proactive client communication. “We focus on prudent cash flow management, diversified client portfolios, and structured project planning to reduce concentration risk,” Pradhana said. “For larger or production-heavy engagements, phased billing structures or project-based payment schedules often create a healthier and more sustainable framework for both parties.”

Jeanne’s prescription at Propel Manila targets what she calls the “silent runway” before invoicing. She advocates for shared service-level agreements that impose committed timelines on each step of the pre-billing process — from PO issuance to vendor onboarding to invoice acknowledgment. 

“None of these touch the headline payment term,” she said. “They target the silent runway in front of it — where 30, 45, 60 days actually hide. The same way we’d align with a client on a creative timeline, we can align on documentation turnaround.”

Rethinking the conversation

Perhaps the most pointed reframe came from Propel Manila’s Jeanne, who argued that the industry may be directing its energy at the wrong part of the problem entirely.

“The bigger story isn’t simply ‘clients paying late,'” she said. “It’s that approval and compliance processes have grown more layered on both sides — POs, service agreements, completion sign-offs — and the payment clock effectively starts much earlier in that chain than the invoice date suggests.”

Joanne’s argument is that the real time loss happens in the invisible runway before an invoice is even submitted. An unacknowledged invoice can sit in a client’s system for weeks before the official payment clock begins. Vendor onboarding that should have been completed at kickoff gets done post-delivery, stalling the billing process entirely. POs that should have been issued upfront arrive late, leaving agencies delivering work with no document to bill against.

Her prescription: shared service-level agreements that impose committed timelines on each of these steps. “None of these touch the headline payment term,” she said. “They target the silent runway in front of it — where 30, 45, 60 days actually hide. The same way we’d align with a client on a creative timeline, we can align on documentation turnaround.”

Should regulation enter the picture?

With the issue gaining visibility, the question of whether government or industry intervention is warranted has begun to surface. Opinions, however, are divided.

Daryani believes existing commercial contracts already provide agencies with legal recourse — but sees room for industry bodies to go further. 

Beyond regulations, he floated a more practical idea: “Industry bodies can certainly do more — like calling for better regulations on TOP, or creating a blacklist of regular defaulters to protect the industry at large.” 

He was also quick to credit 4As Malaysia for raising the issue publicly. “4As Malaysia has demonstrated exemplary leadership in this matter and deserve commendations for the same,” he said.

Pradhana takes a more measured stance on hard regulation, preferring industry-led frameworks over government mandates. “Rather than strict regulation, I believe the industry would benefit more from stronger standards, transparency, and shared best practices established through industry associations and market stakeholders,” he said. “Every market operates with different commercial realities, so maintaining flexibility remains important.”

A shared responsibility

What emerges from these conversations is not a simple villain-and-victim narrative. The issue is structural — shaped by procurement complexity, layered approval processes, and an industry culture that has, perhaps for too long, absorbed financial imbalance as an accepted cost of doing business.

But there are signs of a shift. Agencies across the region are pushing back — not loudly, but deliberately — through tighter contracts, sharper client screening, and more disciplined billing processes. Viola perhaps put it most plainly: “Nothing beats honest and open communication with clients.”

And with 4As Malaysia now putting the issue squarely on the industry’s agenda, the hope is that candour at the association level will translate into change at the contract level — for the benefit of agencies, their vendor partners, and ultimately, the brands they serve.

As Pradhana put it: “The strongest agency-client relationships are built not only on creative ambition but also on trust, transparency, and long-term sustainability.”

***

Whether through stricter internal processes, earlier commercial alignment, or broader industry advocacy, the path forward demands accountability from all parties. Agencies are not banks. But until the industry collectively treats fair payment as a baseline standard rather than a negotiating point, many will continue operating as though they are.

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According to the association, payment cycles that were once typically settled within 30 days have increasingly stretched to 90 or 120 days, with some taking even longer. The group said this effectively forces agencies to finance client campaigns upfront while waiting months for payment.

Tan Kien Eng, president of 4As Malaysia, said agencies are increasingly being expected to absorb operational costs while awaiting delayed payments.

“Advertising agencies are not banks,” said Tan. “Yet, we are increasingly being placed in a position where we are expected to fund campaigns upfront, absorb operational costs, and at the same time wait months to be paid. This is neither fair nor sustainable.”

Tan noted that the issue is especially significant in campaign production, where agencies are often required to pay third-party vendors such as production houses and talent ahead of receiving payment from clients. He said this creates cash flow challenges for agencies.

He added that talent-related expenses make up a large proportion of agency operating costs.

“As people-led businesses, up to 70–80% of an agency’s cost base is talent. When payments are delayed, it directly affects our ability to pay our people on time, invest in new capabilities, and retain the best talent. Ultimately, this weakens the quality of work delivered to clients themselves,” he added.

4As Malaysia said the issue extends beyond individual agencies and could impact industry standards more broadly, as agencies accepting longer payment terms may contribute to wider adoption of such practices across the market.

Tan said the issue should also be viewed from the perspective of fairness and corporate responsibility.

“This is not just a commercial issue; it is a matter of fairness and responsibility,” said Tan. “Many advertisers have strong governance frameworks and codes of ethics, yet extended payment terms contradict these principles. It raises a simple question: how can fairness be upheld when one party carries the financial burden for months?”

The association is urging advertisers to return to more reasonable payment practices, ideally within 30 days, while encouraging agencies to monitor payment cycles closely and discuss payment expectations upfront with clients.

4As Malaysia also said industry-wide cooperation would be necessary to ensure more sustainable business practices across the advertising ecosystem. The association added that Malaysia could explore broader policy measures aimed at promoting fair payment practices and greater transparency among large organisations.

Tan said agencies remain critical partners in helping brands grow through creativity and strategic work.

“A healthy agency ecosystem is not a cost, it is a competitive advantage,” Tan emphasised. “Agencies play a critical role in building brands through creativity, innovation, and strategic thinking. But creativity cannot thrive under financial strain. If this continues, advertisers risk weakening the very partners they rely on to build their brands.”

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This initiative follows the recently issued Request for Proposals (RFP) from the two companies inviting advertising agencies to submit their proposals for a consumer education campaign addressing the “Phased Liberalisation of Motor and Fire Tariffs.”

Said RFP involves a clause stating, “All supporting materials and other documentation submitted with the response will become the property of the associations unless otherwise requested by the proposers at the time of submission.”

Within clause 2.14, it states that ideas, concepts, strategies, trademarks, and materials presented by any advertising agency to an advertiser in an RFP are intended solely for enabling the advertiser to decide whether to engage the agency’s ongoing services. 

Furthermore, unless expressly requested in writing and objected to by the agency before proposal submission, both companies also unethically assert ownership and retention of the intellectual property described in an agency’s pitch proposals.

In a media statement by the Association of Accredited Advertising Agents Malaysia, CEO Khairudin Rahim stressed that clause 2.14 is deemed oppressive and highly prejudicial to agencies that are unsuccessful, as it deprives them of intellectual property rights for future bids or projects.

At the same time, said RFP is also anticlimactic given the 4As’ repeated calls for advertisers to eliminate unfair and unethical intellectual property retention clauses from procurement documents. It thus amounts to a demand for free ideas, contradicting core business principles and global norms of business dealings with the creative industry.

Following this event, 4As advises agencies not to join bids or pitches with unethical clauses. They also suggest that agencies keep ownership of their ideas, plans, and work unless the advertiser is willing to fairly compensate for the rights.

The 4As appealed through correspondence for PIAM and MTA to remove Clause 2.14 from future RFP and pitch documents directed at advertising agencies. Since its appeal on August 9, 29, and October 26, there has been no notable response from PIAM or MTA.

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According to a recent statement from Rahim, 4AS Malaysia has been made aware of emerging practices amongst advertisers declining to provide pitch disbursements to its member agencies, with some advertisers having even gone to the extent of compelling 4As member agencies to secure a written exemption from the long-standing 4As pitch disbursement by-laws.

For context, the pitch disbursement requirement is intended to allow 4As members participating in a pitch to recover some of the costs associated with preparing customized strategy, ideas and creative submissions for the pitch. 

However, all percentage of the successful member agency’s pitch disbursement allocation would be returned to the advertiser upon the results of the pitch being announced.

The commission has also noted that there are a few advertisers who call for sham pitches with the agency selection already made, prior to the presentation, while others have exploited agencies by using speculative pitches to garner free brand positioning, strategy, and creative ideas. 

“Some advertisers have even tried to legitimize the practice by introducing clauses into their pitch requirements that demand the right to utilize or release an agency’s proposals, documents, concepts, ideas, and intellectual property regardless of whether the Agency is chosen in the competitive pitch,” Rahim said.

He also added that a pitch exercise should not be used as an opportunity to mine agencies for ‘free’ ideas. 

“Unfortunately, part of the ongoing work that the 4As undertakes is having to highlight unfair and unethical practices by Advertisers including the requirement for exorbitant tender document fees, tender deposits, and demand for retention of pitch ideas,” he said.

For 4AS Malaysia, they are offering two best practices for advertisers: firstly to work with their existing advertiser-agency relationship and try to make the agency relationship work rather than thinking that a move to a new agency is necessarily the best answer. And second, using an agency’s credentials or past case studies as the sole selection criteria before engaging a new agency.

“The 4As believes that with clear understanding of the rationale, advertisers will support the need for pitch disbursements, and support 4As agencies in their drive to provide the best possible solutions to their prospective clients,” he concluded.

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Open to Malaysians who are full-time lecturers in advertising and marketing communications, 4As scholarships for the IPA Foundation Certificate are focused on improving competency of teaching for the respective fields.  

Khairudin Rahim, CEO at 4AS Malaysia, acknowledges the growth of the advertising industry and the increasing number of interested students, which calls for more lecturers who teach advertising and marketing communications who possess practical experience of the industry.

“The IPA Foundation Certificate offers them a comprehensive and up-to-date understanding of the practical day-to-day work of marketing communications, from understanding the advertiser’s business, writing strategy and briefs, media, ideation, creative development up to campaign effectiveness. These basics never change. Get them right and the rest will fall in place,” he added.

Previous scholarship recipient Heidi Tan from Multimedia University said, “I felt that my students were able to benefit from her participation in the IPA course. The case studies provided in the course were my favourite and I have been sharing these with my students so that they can see how strategies and effective design work hand-in-hand to create successful campaigns.”

Developed by the Chartered Institute of Practitioners in Advertising (IPA), the IPA Foundation Certificate is the world’s premier professional advertising qualification, which is recognized by 4As as a practical requisite, offering scholarships for advertising educators since 2017. 

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The workshop is an independent initiative of the industry body in Malaysia with the goal of raising industry standards and fostering continuous professional development for agency talent.

‘4As Consumer Insights Workshop’ is intended to provide account planners, account managers, and creatives with key skills in three areas – Understanding insights to a deeper level than others in the industry; Learning how to uncover, hone, and write more compelling insights that will catapult brand relevancy; Understanding what not an insight is and why data is different from insight.

“If marketing is about meeting customer needs profitably, then insight is the key tool that drives marketing. Products deliver functional needs. Brands also deliver emotional needs. The very best marketers and marketing companies invest in trying to understand their customers better than their competition. If you can uncover and tap into an enduring insight, you have created a sustainable brand. Thus, insight is the backbone of all marketing,” said Khairudin Rahim, 4As CEO.

The workshop will be conducted by Paul Arnold, an IPA UK-endorsed trainer with extensive experience in account management and planning for Saatchi’s and Grey for over 30 years, working across a large range of international brands, and winning five EuroEffies for Campaign Effectiveness. A

In addition, Arnold is also a trained Psychologist, with an MBA, an MSc in Organisational Change, as well as being a certified coach.

“Once again, the 4As is striving to provide our industry professionals with access to leading edge, bespoke and highly relevant training that’s not available anywhere else,” said Khairudin. 

“Additionally, we have sought out people like Paul Arnold and other IPA (UK) certified trainers who are the ‘cream of the crop’ to conduct this training, with the goal of raising the standard of competency across the industry,” he concluded.

Just this April, the organisation has elected its council office bearers who will serve the body for the next two years. Havas Group’s group managing director Andrew Lee has been re-elected as president whilst Ryusuke Oda, managing director of Hakuhodo Malaysia, has been named as new vice president.

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