Retailers, trucks, delivery – digital ads!
It follows, doesn’t it?
Give this a go…
As retailers see their margins depleted and ecommerce competitors grow like weeds, some in the brick-y retailer world see the faster delivery of products as a way to differentiate and maintain there brick-and-mortar edge. They’re in the neighborhood, so why not leverage the location and deliver those televisions, dishwashers and similar household consumer products on the same day the consumer comes in and buys it? Sounds like a plan, for a while, but apparently Amazon and Google are already thinking the same thing so watch out, Corner Store.
In digital ads, there appears to be a similar type of delivery issue that could be optimized – payment. Typically a publisher or an ad network could see payment from its prospective buyers at intervals of 30-90 days from the date media is purchased. In a programmatic, real-time world, it would seem reasonable to expect an increasingly real-time transfer of cash between two parties.
For the seller, the benefits of real-time payment are putting money to work on behalf of their sell-side business faster which, in turn, should benefit the buyer with improved products, services and/or more inventory.
As an aside, look at the agency world where payment terms with big brand advertisers potentially string things out even farther as ad agencies may not pay their partners before they’re paid. Does that serve the agency, the advertiser, the ecosystem at-large?
Back to digital ads – of course, with faster payment, the buyer loses the opportunity to extend the use of its cash reserves via flexible credit terms for 30, 60 or 90 days. Good bye, Long Term Ad Capital.
Now this is all easier said than done with part of the compression of the payment window coming down to improved billing reconciliation and discrepancy management.
You could say the real-time payment idea already exists today for Google, Facebook and a few others who let self-serve advertisers buy, and then charge them at the end of the day or after they pass a certain dollar threshold. Of course, Google doesn’t pay its Adsense publisher network until near the end of the following month, which is pretty fast compared to some other ad networks.
In addition to tech limitations, the payment window concept may speak to how commoditized the space is. Yet, payment can be a relationship catalyst – companies want to be paid faster and when they are, they may work harder for you, cut you some slack, answer the phone faster, etc.
There’s a lot of nuance to this topic, but there’s a payment window out there and it is closing.
