In this episode, Lee-Ann interviews Chris Pettit, CEO and Co-Founder at Revving. The hot topics of improving cashflow and growing your affiliate business are discussed, as well as how Chris identified the problem of delayed payments in the digital economy, particularly in ad tech and affiliate marketing. Listen out for some stats to make you sit up and take notice! Chris explains how Revving uses technology to compress payment terms and provide instant payments to publishers, ultimately improving cashflow and enabling businesses to grow.
Talking points include:
- The impact of faster payments on loyalty programs.
- Delayed payments in the affiliate marketing industry – with 40% of payments in ad tech globally being overdue.
- How to improve payment processes
How big of a problem are delayed payments?
Lee-Ann begins by asking Chris to explain exactly how big a problem delayed payments are in the industry right now.
Chris replies, “Yeah, it’s big. And I think maybe what I’m going to do is two things. One is I’m going to talk about it at a national level and just generally the problem we’re facing as a nation in terms of small businesses and businesses, generally.
“Then I’m going to bring it back to talking about affiliates. So delayed payments, extended payment terms and underpayment is basically endemic across ad tech generally. I mean, late payments across our country have hit a three year high for SMEs. These top ones are just UK stats and then I’m going to come on to global stats. So, in the UK alone, and obviously we can extrapolate that across the globe, but in the UK alone, the Federation of Small Businesses is reporting that on average 50,000 businesses are closing every year due to late payments. There’s about two and a half billion pounds worth of capital locked up in late payment terms just in the UK economy alone. So that’s just to give you a sense of scale just here.”
Operating in uncertainty
Lee-Ann comments, “If you think about the average affiliate, and I’m not talking about big media partners, I’m talking about the person who’s got three to 10 staff running an SME, building a couple of publisher sites and doing paid media and doing all the other things. You’re telling me that currently here in the UK, 45% of the revenue that they’re generating is being paid to them 90 days or later. How do they pay their staff? How do they pay for the paid ads that they’re doing? Just let that sink in for a second. It’s almost impossible for a publisher to start a business?”
Chris agrees and goes on to explain, “There’s two layers to that. That’s just payment terms. But then when you look at validation periods as well, on top of that, we’re seeing that validation periods, so obviously, this is where the networks aren’t auto locking, but they vary so dramatically. So we’re seeing over 50% of the flows from the customers we’re working with. It’s taking 60 plus days to validate.
“But what’s even more, I think, important, and this will flow into your question around the certainty and the decision making and what we can do as a publisher if we don’t have access to the money, is we’re seeing that there’s the payment predictability of those validation periods are changing. So, month-to-month, they can vary within two to four weeks, either side. So it could be one month, you’re validated on two weeks, the next month it takes four weeks and it flip flops.
“The critical bit here is I think it’s bad enough that you’ve got extended payment terms and varying validation periods. But If everything was metronomic and it was the same every month and you knew you were going to get paid and the validation was going to happen, then that would at least give you some certainty over what you were going to do.”
Transform your business
Lee-Ann asks, “What would you suggest that brands or publishers do in the first instance to look at their operational financing to see where they can actually improve things and maybe get in contact with you if they want to have a conversation”
Chris replies, “I think what I really would love people to think about when they’re having those really exciting meetings and they’re putting a load of stickies on the wall and coming up with great ideas is just put one for Revving in the middle and have a think about if you had your cash today, or you could deliver that cash to your customers more quickly today, how would that transform your business? Would it give you a positive ROI? Because I’m pretty confident based on the businesses we’re working with now and the ones we’re talking to and the stuff coming down the pipe, I’m pretty sure the answer to that question is going to be yes.
“Once they want to get in touch, we’re here to support in that journey, both in terms of innovating and talking and building use cases, but also ultimately supporting them in their endeavors. So yeah, that would be my one piece of advice.”
You can contact Chris here to talk about whether you’re the right fit and whether this service can help you in the country that you’re in.
Listen to find out more about:
- Revving’s technology and platform provide visibility and access to capital, allowing businesses to innovate and transform their operations.
- Why faster payments can lead to better planning, resource allocation, and ROI for affiliates.
- Affiliates and brands should consider the impact of working capital
Key segments of this podcast and where you can tune in to go direct:
[07:00] The impact of delayed payments and extended payment terms
[23:50] Transforming Affiliate payments and enabling innovation
[28:30] Taking Action: Considering operational financing and contacting Revving
Coming up on next week’s episode of The Affiliate Marketing Podcast: Will Fraser, Head of impact.com/Advocate
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