Fintech firms are a new and emerging kind of finance company enabled by technology, unique to the 21st century. But finance has been around for a long time, as far back as 611 B.C., in the days of Nebuchadnezzar II, when the first loan for money took place. And over the last 2000+ years, as markets evolved, so has the method of financing them. As we progress into the new decade of 2020 and beyond, one new method of financing is for digital media. Read on to learn how digital media finance can be used in the 21st century to help advertising firms explode with growth. But first…
What is Media Finance?
Media finance is providing of quick capital to media buying firms, so they can finance their ad spend across digital channels of advertising, like Facebook, Google search, streaming TV and digital-out-of-home. Media finance is largely done in the form of invoice factoring or financing, at the cross-section of our economy where finance meets digital advertising.
How does Media Finance work?
Here a few examples of how we provide media finance and how it applies across the digital media eco-system.
Example 1. A website publisher has high quality ads on their website from a major ad exchange. To generate a return, they must get visitors to their website. To do that, they need capital for ad spend on a platform like Facebook or Taboola. Unfortunately, their customers (i.e. the ad exchange), pays them in 30-90 days, so they have a gap between having to spend on Facebook now, and collecting revenue later. In this first example of media financing, the publisher can sell their invoices to OAREX, for “quick capital” up front, in order to finance their ad spend on Facebook.
Example 2. A big agency hires a firm that buys media on platforms like over-the-top television (i.e. streaming TV). The media buyer and agency agree that the agency will pay the media buyer on net 90 days after the ad has been served. But the media buyer needs capital to place the ad initially, as the streaming TV services charge up front. Similar to the publisher, we provide the financing for the ad spend by purchasing or financing the media buyers other digital media receivables.
Where Can You Finance Ad Spend?
With a firm like OAREX, you can finance your ad spend so you can scale your growth. OAREX funds daily, weekly, monthly or on demand. By having access to immediate liquidity, you can deploy funds into hot ad campaigns returning a significant ROI. If we fund you weekly, i.e. we will fund you on day 8 for your prior 7-day period, you can grow up to 8x faster.
What the Future Holds: 2020 & Beyond
As digital media continues to evolve, so will the financing around it. But one thing will hold true, financing will almost always be available, it will just look different than it might have in a while. Also, media financing isn’t going anywhere, because new forms of digital media are popping up all the time, and so will the cash flow solutions that support their growth.
To apply for OAREX’s ad spend financing, you can apply here, and we’ll send you a term sheet in 10 minutes or less.