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Daewoo defaults payment to its ad agency

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Daewoo defaults payment to its ad agency

The Indian Newspapers Association has suspended print ads of the Korean firm, as it has defaulted on payments to one of its advertising agencies, Crayons. Interestingly enough it is a paltry sum of Rs 7.16 lakh that has proved to be Daewoo's undoing.

Crayons, which has capitalised billings worth Rs 28 crore, was the regional agency for Daewoo in 1999-2000 and handled the print campaigns for Delhi and near by regions.

Interestingly enough Daewoo's current agency which is Enterprise Nexus has no complaints against the firm. Enterprise was signed on this year by Daewoo and was behind the new look Total Spice campaign for Matiz.

The whole episode throws up an age old problem confronting Indian advertising agencies. Recently AAAI (the Advertising Agencies Association of India) issued a notice that J K Tyres had defaulted payment to the tune of Rs 1.8 crore to O&M. Despite that, another agency, Contract (which interestingly belongs to the same WPP fraternity) picked up the JK Tyres account.

According to agency sources, AAAI is fairly toothless and so often agencies disregard their notices. And while INS keeps a check on print ads, there's no way of enforcing discipline on non print ads such as on television etc.


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