Recent stories about the financial health of digital advertising companies have swept the industry. Recall the Defy Media bankruptcy and the blow-up of Videology. Defy Media lost their line of credit, and Videology was foreclosed on by their lenders. GroupM, as massive agency, just laid off 3,500 people.
In the general economy, the Federal Reserve has been increasing interest rates. This will to a credit tightening, which basically means money is harder to come by. What does this mean for the industry? Well, the Fed’s moves, coupled with the seemingly widespread poor investments / management in ad-tech, will make money harder to come by for digital media companies.
The signs of credit tightening are evident. Take the Defy Media bankruptcy, mainly a result of their bank pulling their line (i.e tightening credit). And Videology, which was foreclosed on by their lender, for $80 million. OAREX has seen this at a much smaller scale in the SME segment of the market (businesses doing $50k-2M/mo. in ad revenue).
We’ve recently funded deals that were once financed by banks or pseudo banks. These funders are major FDIC insured institutions, or funded by FDIC insured institutions. They take direct credit in their customers (something we do not do). Due to recent events and an overall credit tightening, they were not willing to continue in the deals and fund their customers. They pulled their lines of credit from healthy, growing digital media companies, or they capped their credit limit and stifled their growth.
OAREX does not care about your credit health, or if you operate at a loss. Since we buy your invoices, we only care about your customers credit. Therefore as credit tightens, we can continue to fund digital media companies — especially after your once trusted partner pulls the rug out from under you.
And if you’re monetizing with partners across the ecosystem, it’s important to check their credit and payment history data. We have a tool to help you do that.