LOS ANGELES--(BUSINESS WIRE)--Digital finance company, FastPay, has today released a free, downloadable research report analyzing the average length of payment terms in the digital advertising industry. The findings maintain the notion that long payment terms are standard in the digital advertising industry with data revealing that the majority of invoices take longer than 60 days to be paid by the advertiser/agency.
Among the findings in the report, FastPay’s data shows:
- Only 6% of invoices are paid in under 30 days
- 94% of invoices take over 30 days to be paid
- A strong majority, 62% of invoices, take over 60 days
These results stand in stark contrast to recent reports which proclaim that the majority of invoices in the industry are paid within 30 days.
FastPay founder and CEO Jed Simon states, “Delayed payment terms have become a highly-debated topic within the advertising industry recently, with little clarity on true facts. As the primary financier to the digital advertising industry, we aggregated and analyzed our proprietary dataset to present the industry with a definitive and objective view of the length of advertiser and agency payment cycles.”
The disconnect in the findings between FastPay’s report and other reports, such as 4A’s (American Association of Advertising Agencies) are partially attributed to differences in methodology and scope. While 4A’s survey concluded that Net 30 was the predominant standard for advertiser payments to agencies, their report only accounted for 93 premium agencies directly serving the largest brand advertisers, whereas the FastPay report extended this analysis to the rest of the digital ecosystem.
FastPay’s statistics are based on a representative sample of 2,500 invoices (out of 10,000 financed that FastPay has funded) from nearly 300 companies that span the breadth of digital advertising ecosystem. This expanded dataset gives a reliable panoramic snapshot of the digital advertising industry as a whole and breakdowns of specific industry segments are also included in the full report.
The results of FastPay’s report quantitatively verify the anecdotal notion that long payment terms are standard in the digital advertising industry. As such, business owners will need to adapt to these lengthy payment terms by becoming more financially sophisticated in identifying strategies to support their operating capital.
FastPay’s report, entitled “Real Time Ads, Delayed Payments,” is available as a free download at www.gofastpay.com/research
FastPay is a fin-tech acceleration platform that enables digital businesses to overcome the struggle of long receivable cycles by providing lines of credit. By combining proprietary technology with industry expertise, FastPay can assess the creditworthiness of a digital business and provide loans ranging from $100k to several million dollars in under 48 hours. FastPay has already financed $200 million to clients across the entire digital ecosystem.