4As Malaysia: Agencies are not banks for brands

The Association of Accredited Advertising Agents Malaysia (4As Malaysia) is raising concerns over what it describes as increasingly unfair and extended payment terms imposed by advertisers on agencies, warning that the practice is placing mounting financial pressure on the country’s advertising ecosystem.

According to the association, standard 30-day payment cycles have increasingly stretched to 90, 120 days or longer, effectively forcing agencies to shoulder the financial burden of campaigns long before payments are received.

Don’t miss: Interview: 4As Malaysia's new leaders on major adland shifts

“Advertising agencies are not banks,” said Tan Kien Eng, president of 4As. “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.”

The issue is said to be particularly severe in campaign production, where agencies often have to make advance payments to third-party vendors such as production houses, talent and suppliers, despite delayed reimbursements from clients.

Tan explained that this creates a growing cashflow mismatch across the industry, especially for agencies whose largest operational cost is people.

“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 said.

Beyond individual agencies, 4As Malaysia warned that prolonged payment cycles are beginning to impact the wider industry ecosystem. The association said agencies that accept such terms risk normalising unhealthy business practices, contributing to a broader “race to the bottom”.

“This is not just a commercial issue; it is a matter of fairness and responsibility,” Tan added. “Many advertisers have strong governance frameworks and codes of ethics, yet extended payment terms contradict these principles.”

The association is now urging advertisers to move back towards fairer payment practices, ideally within 30 days, while encouraging agencies to be more proactive in setting clear payment expectations upfront and monitoring payment cycles more closely.

According to 4As Malaysia, stronger industry-wide alignment will be necessary to create a healthier and more sustainable operating environment for agencies and advertisers alike.

“A healthy agency ecosystem is not a cost, it is a competitive advantage,” Tan said. “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.”

The association also suggested that Malaysia could benefit from broader policy measures promoting fair payment practices and greater transparency around payment terms among large organisations.

Be part of #Content360 Malaysia, 13 May 2026, where creativity and community collide. Explore how AI-powered imagination, culturally resonant storytelling, and platform-savvy strategies are shaping the future of content. Gain practical insights, discover new tactics, and learn how the region’s top creators and brands are crafting campaigns that truly resonate.

Related articles:
Where is growth coming from in 2026? 
How Malaysia’s agencies are reshaping talent, tech and creativity in 2026 
What can advertising re-learn from PR?