Waiting for money is a universal frustration – whether it’s the paycheck at the end of the month, the invoice stuck in the system, or the refund taking weeks to process. If that money arrived the moment it was due, we could all plan ahead, invest, or simply move forward without the friction.

Adtech companies have the same dilemma, and the same dream, but with a lot more opportunity for friction. Not only does the money come slowly along the programmatic supply chain – frequently two or three months, often as long as 180 days – but the spider diagram of interdependent businesses only ever grows more sprawling and complex.

In a supply chain with so many contributors, payments are an elaborate chain reaction, and very hard to speed up. For a publisher, agency, affiliate, cashback specialist, or any other company in adtech, the thought of what they could do right now with all the money stuck in the pipeline is hardly worth considering.

Less friction, more freedom

But if the friction was relieved along the supply chain, what kind of opportunities would that present? If you, as a company in that chain, had sufficient cash flow every month, on time, when you needed it, what would that allow you to do?

In the most general sense, you could grow the business. Plan more effectively. Escape your reliance on delayed payments. You could develop a profitable new product, change your commercial structure, free up marketing budget, or provide the sales team with a pool of liquidity to grow revenue.

Wherever digital media is being monetised, there are gains to be made in removing friction from the system and letting companies focus on innovation and growth. And if you remove friction right along the chain, you unleash the potential for growth across the industry as a whole.

Where are the pain points?

In the simplest case, a brand advertiser deals with an agency, which deals with a DSP, an SSP, and ultimately a publisher – all of them juggling costs, all waiting to get paid at some point.

Each link in that chain brings a delay in payments. And since brands and agencies tend to hold onto funds for as long as possible, those at the bottom get squeezed the hardest.

Perhaps the brand at the top pays its bills in 60 days, but its agency pays upfront for the brand’s media, shouldering a debt in the meantime. Further along, companies work hard to build and maintain their commercial relationships in spite of their cash flow challenges: DSPs and SSPs might accept less in order to get paid faster; perhaps paying their debts when they themselves haven’t been paid, or risk losing long-term business.

The payment chain favours bigger companies, who usually require rapid payment but settle up slowly. Meanwhile, some companies operating at the end of the supply chain have numerous debtors at once. An affiliate, for example, might have 100 debtors at any given time.

How do we ease the friction?

Injecting cash into the system might seem simple; banks, factoring firms, and lenders all offer short-term solutions. But those institutions typically lack insight into the unique complexities of the programmatic ecosystem.

At Revving, we understand publishers and adtech businesses and their cash flows. We’re the only capital funding platform purpose-built for adtech, that integrates direct to source. As we are able to capture and verify sales data right along the programmatic supply chain, we can provide instant access to advances against revenues.

That enables companies to access earnings almost instantly, at market-leading payment terms. Our technology integrates with digital marketplaces and platforms, consolidating payments to present a clearer picture of what is owed and when. We remove the cash flow bottleneck, and offer clarity and liquidity.

Short-term credit carries a cost, but so does waiting months for money to be paid. Companies that weigh the numbers tend to find that the cost is more than justified by the return and enjoy enhanced cash flow, speed, agility, and performance.

Businesses that can speed up their cash flow enable growth and reinvestment at a time when it’s sorely needed. And anyone, anywhere along the chain, can understand why that is a cause for excitement.

Also published in: The Drum