Managing cash flow in digital media can be tough. Normal payment terms vary from 30 days to 120 days, and all our internal data suggests pay terms are getting longer. Many ad networks pay with a high degree of certainty, but always a few days late. Often times it takes a simple email follow-up to an ad network’s accounts payable department to get your money. They do pay, but it’s just a pain to collect. We’ve also recently seen payment terms being extended (sometimes unilaterally), completely beyond a publishers control. If you’re seeking a new demand partner, you have to be weary of the following:
- Their ability to pay — are they a good credit?
- The pay terms — how long are you willing to wait?
- Their pay history – what’s their track record?
- Their pay timing — are they consistently late?
Below is the best way to vet out a new demand partner.
1. Are they a good credit? Do your research.
What are people in the industry saying about them? Check industry threads like the Reddit AdOps thread. Also do a quick Google search, is there any news about late payments or lawsuits? It will be tough to find this information, but you can piece together anecdotal evidence – how many employees do they have? Is their C-Suite on LinkedIn, or obscure and hard to find? How many offices do they have? Are they well capitalized (i.e. publicly traded)? Have they raised any equity to support the business? Check Crunchbase. Who are their backers?
These are questions you have to ask. Use your gut, since you won’t have much direct evidence to go off of.
2. What are their pay terms?
Paying on 90+ terms is not unusual. But the question is, do you want to wait that long? Especially with seasonality, you could miss out on growth if you’re waiting to get paid. Take this into consideration. Typically, the sooner an ad network pays, the better (unless you’re willing to wait 90+ days for ridiculously high CPMs).
3. What is their pay history? Ask for credit references.
You may not have direct data into their payment history, but you can ask for credit references. Before you sign up and monetize your audience with an ad network, ask for credit references. You need to make sure they have happy customers. But this will only take you so far, because obviously a network is never going to put down someone they owe money to as a reference. But again, this is all anecdotal.
4. Are they ever late? Use Project Rank, our free payment data tool.
We see the uncertainty around payment in the industry as a major problem. To alleviate and engender goodwill, we’ve put together a free payment history tool. With it, you can find:
- Stated terms of each ad network (30, 60, 90 etc.)
- How long it actually has taken them to pay us historically
- Payment History (Usually Early, On Time, Usually Late)
- Payment Method (ACH vs. Wire vs. Payoneer or Other)
- Headquarters / Place of Business
- Ownership (Private v. Public)
If they aren’t in the database, or it says “not enough information”, that means one of 3 things – we never bought an invoice payable by that company, or they refused to disclose info to us, or they have some type of mark on their credit (i.e. a tax lien or bankruptcy) that disqualifies them from our system.
It’s imperative that you go through this process prior to on boarding new demand partners. The last thing you want is to ramp up with an ad network, only to find out they can’t pay you.
As always, let us know how we can help you.