Only 2% of Demand Partners Consistently Paid On Time in H1 2023, According to OAREX

OAREX, the provider of fast and flexible funding for digital media companies, today announced the release of its H1 2023 Digital Media and Advertising Payments Report. The report, which reveals data and trends of payments across the digital media and advertising ecosystem, confirmed that the trend toward later payments continued in the first half of 2023, with 46% of all payments reported as late, an increase of 4% from the H2 2022 report findings.

In addition to the continued rise of late payments, OAREX’s report confirms an increasing trend among underpayments. Perhaps most concerning is that both late payments and underpayments across their portfolio are now nearing levels not seen since the COVID pandemic lockdowns in H1 2020.

The key findings include:

• Late payments rose again during H1 2023 from 42% of all payments to 46%. As the economy continues tightening, late payments have steadily risen and are nearing the COVID pandemic highs (52%).
• Late payments among agencies are more frequent and getting longer – 55% of all agency payments were late in H1 2023 (up 11%). Even worse, payments are increasingly getting longer, with 36% of late agency payments arriving more than 15 days late (up 8%).
• Underpayments rose for the third consecutive period and are also near COVID pandemic highs, now representing 15% of all payments.
• Overall, payments across the portfolio remained flat at an average of two days late. 
• Only 2% of debtors always paid on time, a decrease from 10% in H2 2022 and dropping below COVID levels (4%). Offsetting this was a significant decrease in the number of debtors who always paid late, which dropped from 29% to 17%.

The full OAREX H1 2023 Payments report can be found here. 

The data presented in the report was collected from the record of payments OAREX received from companies, which include ad networks, exchanges, Supply Side Platforms (SSPs), Demand Side Platforms (DSPs), media buyers, advertisers, and ad agencies, across the digital media and advertising ecosystem. 

For the report, OAREX analysts reviewed two key data points, which include: 

• Timing of Payments. How early or late does a debtor pay, relative to their stated net terms under which the invoice should be paid? 
• Amount of Payments. How much did the collected amount vary from the amount billed? This data point considers all types of advertiser offsets or disputes that may arise. 

In response to the continued trend in late payments, OAREX EVP Nick Carrabbia commented, “Over the last year and a half, payment performance has consecutively worsened. During that time, the AdTech industry experienced multiple bankruptcies, leaving thousands of supply partners licking their wounds. A tightening economy accelerates this cycle, and nothing in our payment data suggests a change in trend is on the horizon. We remain optimistic for the future of AdTech, but expect to see more shakeouts until one of the following happens: either there is a miraculous and unexpected pivot towards easing policies and economic growth or demand partners get serious about credit management.” 

OAREX continues to receive a record number of applications from intermediaries and supply partners across the advertising supply chain. Due to increased market risk, banks and investors have grown more selective, making it difficult for companies to secure liquidity vital to their survival. Furthermore, bankruptcies continue to rise, and partners across the supply chain seek new ways to improve their credit monitoring and approval process. As a result, companies are turning to OAREX for their flexible, non-dilutive financing solutions and free access to their credit insights. These tools enable them to scale on their terms by taking back control of their cash flow while reducing risk exposure.

In line with the industry-wide push for transparency, OAREX began releasing quarterly payment data in 2018 and shifted the payments study report from quarterly reviews to semi-annual in 2021. The following report will reflect H2 2023 performance and be published in Q1 2024.

About OAREX Capital Markets, Inc. 

OAREX, the Online Ad Revenue Exchange, operates a digital revenue exchange where media businesses can exchange future revenue payouts for capital now. Established in 2013, OAREX has become a worldwide leader in financing for media and advertising businesses. East West Bank’s investment in OAREX is a testament to its model and the digital media industry as a whole. Visit oarex.com for more information or visit go.oarex.com to open an account.