BMP and its sister media agency OMD are understood to be among the creditors owed $30m (£18m) following the collapse of online fashion retailer Boo.com.
BMP created the £15m ad campaign for Boo’s launch last November and OMD bought the television airtime, poster space and press spots. BMP joint managing director Chris Cowpe refused to comment on rumours circulating in the Internet industry that his agency was still owed money by Boo.
Mick McLoughlin, the KPMG liquidator brought in last Wednesday to seek a trade sale for the remnants of the company, said that “quite a few people in the ad industry” were among the creditors.
OMD managing director Paul Taylor was not available for comment, nor was anyone at Quantum, an online agency which bought and planned the online advertising for Boo.
Another agency, Hyperlink Marketing, which designs, builds and markets websites, also refused to comment on whether it had been paid for work done for Boo.
One source says the agencies will not suffer losses if creditors are not paid their dues, since they are covered by credit insurance. But the source adds that premiums for credit insurance on advertising budgets for pure dot-com companies will be driven sky-high following the demise of Boo.
Boo’s collapse has set off a wave of panic selling of technology stocks, and has raised doubts over whether other e-commerce start-up companies will continue to receive funding for their projects.
BMP’s experience with Boo should also act as a warning to other agencies which take on Internet ad work without asking for payment in advance.
As many start-ups begin their campaigns without having secure long-term funding in place, reluctance to take the advertising brief could lead to a downward spiral, damaging the prospects of new online businesses.