Ad tech has always lived in a world where money moves slower than the ads it sells. Everyone’s floating — fronting payments to publishers while waiting weeks, sometimes months, for agencies and advertisers to settle up. The cost of doing so is only rising.
Nearly six in 10 invoices (58%) in the sector were paid late in the first half of the year, according to payment data form OAREX. Almost one in five arrived more than two weeks past due — after the original 60, 90 or even 120 days. Granted, this long tail of payments isn’t new. It’s how the machine has always worked. Advertisers push out payment terms. Agencies pass the delay downstream. From there, ad tech vendors draw on credit lines to keep publishers paid. Everyone finances everyone else. And as rates rise, the cost of keeping that wheel spinning climbs with it.
“If nobody was floating money there would be chaos,” said Adam Schenkel, GumGum’s evp of global platform strategy and operations.
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