Digital Media Receivables Financing

In 2016 for the first time ever, digital advertising — across desktop and mobile — exceeded television. This year alone digital advertising is expected to exceed traditional avenues by over $10 billion globally. It’s evident why: most of the world owns a smart phone or uses social media, and the internet will soon become ubiquitous thanks to pioneers like Elon Musk. Given the number of eyeballs available in the digital world, ad budgets are starting to be weighted toward desktop, mobile and smart phone apps.

Advertising as a Revenue Driver… and Revenue

Many companies employ advertising as a revenue driver. The formula is seemingly simple: promote your product, app or content across various advertising platforms (like Facebook), in order to drive sales, downloads and clicks. But if you don’t sell a physical product, then how do you make your money? For many digital businesses like publishers (i.e. content publishers and smart phone app developers), it’s advertising. They’ll promote their digital property in order to drive activities like downloads and clicks to their website. Here is a breakdown of the digital media revenue life cycle:

digital media receivables financing

The only issue facing publishers is the mismatch between their income and expenses. Content promotion and PUA platforms requires money up front, but programmatic ad revenue and marketplace revenue (i.e. App Store, Android, Amazon) pays anywhere from 30-90 days. Without being able to immediately receive money from clicks and in-app purchases, publishers are forced to operate under the status quo or find a way to raise capital for promotion. That’s where digital media receivables financing comes into play.

What Are Digital Media Receivables?

Digital media receivables are invoices created from advertising revenue and purchases generated within digital mediums such websites and smart phone apps. Essentially any revenue generated from a digital platform (advertising, affiliate revenue, in-app purchases) payable at a later date (30-90 days), is a digital media receivable.

Digital Media Receivables Financing

OAREX offers digital media receivables financing, by purchasing outstanding digital ad revenue and marketplace revenue payable to publishers. Each month, as OAREX’s publisher clients generate ad revenue and in-app revenue, OAREX will advance funds against those invoices that are normally payable in 30-90 days.

Advantages of Financing Digital Media Receivables

Digital media invoice financing allows publishers to immediately reinvest the proceeds into hot content promotion and PUA campaigns that have a direct, measurable ROI (i.e. revenue recycling). In turn, this fuels growth because publishers are able to turn over their money into campaigns with a positive ROI more often, thus increasing overall revenues. Additionally, having the ability to shore up outstanding revenues and match income and expenses allows publishers, who often have cyclical revenue cycles, to prepare for both busy and slow season.