In line with the industry-wide push for transparency, we began releasing quarterly payment data in May, 2018. Our quarterly report includes data on payments OAREX has received from companies across the digital media & advertising eco-system, including: ad networks and exchanges, Supply Side Platforms (SSPs), Demand Side Platforms (DSPs), media buyers and ad agencies (all what we refer to as “debtors” in this report). See the full list on pages 14-17.
Factors Analyzed in this Report: Timing & Amount
Across the entire eco-system, pain points from payments are felt for two main reasons: late payments or under-payments. That is what we focus on for this quarterly report.
Timing of Payment. This inquiry asks, “How early or late does a debtor pay, relative to their stated net-terms under which the invoice should be paid?”. We call this factor the “Net Terms Differential”.
Amount of Payment. This inquiry asks, “How much did the collected amount vary from the amount billed 30, 60 or 90 days ago?” . This inquiry takes into consideration any type of advertiser offsets (i.e. robotic traffic, fake installs) or disputes (brand awareness, sequential liability, etc.). Given that a missed payment could crush a digital media firm (especially if they have debt), we focus on this metric as the 2nd core pillar to be analyzed and refer to it as the “Paid Differential”.
Data from 5000+ invoices, 161 Debtors
For this report covering July, August and September, 2019, we analyzed 5,153 invoices, for which we received payment from 161 different debtors.
How we obtain the data: first hand
We get this information first hand because we collect payments from debtors. Debtors are liable to pay OAREX directly because we take ownership in the invoice under a Purchase & Sale Agreement with our clients. All of the data contained in this report is obtained first hand.
Key Highlights of the Q4 Report
The Good
- The percentage of late payments that paid 30+ days late fell by 53.8% between Q2 and Q3 (page 7).
- Payments more than 30 days late fell by more than 50% between Q2 and Q3 (page 7).
- The percentage of debtors that never underpaid us jumped 41.1% (page 13).
- Payment amounts are stabilizing. In Q3, payments received that were paid within 1%, high or low, of the invoiced amount, is at a peak of 74% historically page 11).
The Bad
- Timing 48% of all payments received in September were late (page 4).
- Late payments remain very volatile, dramatically changing month-to-month (page 5).
- Payments more than 30 days late out-number payments less than 30 days late by 2-6X (page 6).
- The percentage of debtors paying late half the time or less increased by 73.8% (page 9).
You can download the full report here, no e-mail necessary.