Home Online Advertising FastPay Expands Lending Limits For Audience-Rich And Cash-Hungry Publishers

FastPay Expands Lending Limits For Audience-Rich And Cash-Hungry Publishers

SHARE:

fastpayimgWhile publishers deliver an online ad in fractions of a second, the buyer typically doesn’t pay for 90 days or more. That’s not a relationship that advantages the sell side.

“You have to pay payroll right away and you have to pay supply sources right away, so there’s this working capital friction in ad tech,” said Jed Simon, FastPay founder and CEO.

Companies like FastPay front cash so publishers get paid immediately – and take a cut of the overall spend once it comes through. To do this lending, FastPay integrates or comes to agreements with demand sources – some of its largest being Facebook, Google and SpotX.

Now, FastPay is scaling up. On Monday, it debuted a partnership with the Japanese investment giant Hitachi to begin offering enterprise lending deals of more than $10 million.

“Anyone in the business of lending money spends most of their time thinking about risk and how to properly price it and manage it,” said Tim King, executive director of the corporate lending group at Hitachi.

And because most of the money FastPay receives comes from global brands and agencies, it has a strong credit profile, King added.

FastPay’s pitch to young digital media companies centers on avoiding the need for successive investment rounds or credit lines from traditional banks or financial companies that often see digital media as a risky place to extend cash.

Woven Digital, a media and branded content portfolio geared toward young men, worked with FastPay and “raised a fraction of what many competitors did and … avoided credit lines from institutional banks that felt onerous,” said co-founder and COO Michael Laur.

When Woven worked with financial institutions and Silicon Valley investors, Laur learned they didn’t understand the scale of digital audience growth or the difference between quality and non-quality ad-buying streams.

Digital media requires specific financial services from a company that is part and parcel of ad tech, Simon said, and it’s impossible to shorten the time between ad campaign activation and payment because the buyer still needs to reconcile results. Factors like viewability, attribution and traffic quality disputes solidify the need for buyers to defer payment.

If, however, a publisher’s audience doubles in one quarter but it doesn’t get paid until the next quarter, it’s hard to sustain growth.

Subscribe

AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

“We knew we could grow considerably, but it would have meant constantly raising rounds and raising valuations,” Laur said. “We knew that if we wanted to grow, we needed to be carrying paper.”

Meanwhile, traditional financial services companies like Wells Fargo and Citi, which work with FastPay through their own investments and credit lines, aren’t going to embed themselves in the ad tech world. They also don’t want to expose themselves by lending cash to publishers for ad buys that may not come through.

FastPay absorbs that risk, though Simon says the company has historically only lost about six basis points (0.06%) on the billion and a half dollars it has lent to digital media.

Must Read

Comic: What Else? (Google, Jedi Blue, Project Bernanke)

Project Cheat Sheet: A Rundown On All Of Google’s Secret Internal Projects, As Revealed By The DOJ

What do Hercule Poirot, Ben Bernanke, Star Wars and C.S. Lewis have in common? If you’re an ad tech nerd, you’ll know the answer immediately.

shopping cart

The Wonderful Brand Discusses Testing OOH And Online Snack Competition

Wonderful hadn’t done an out-of-home (OOH) marketing push in more than 15 years. That is, until a week ago, when it began a campaign across six major markets to promote its new no-shell pistachio packs.

Google filed a motion to exclude the testimony of any government witnesses who aren’t economists or antitrust experts during the upcoming ad tech antitrust trial starting on September 9.

Google Is Fighting To Keep Ad Tech Execs Off the Stand In Its Upcoming Antitrust Trial

Google doesn’t want AppNexus founder Brian O’Kelley – you know, the godfather of programmatic – to testify during its ad tech antitrust trial starting on September 9.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

How HUMAN Uncovered A Scam Serving 2.5 Billion Ads Per Day To Piracy Sites

Publishers trafficking in pirated movies, TV shows and games sold programmatic ads alongside this stolen content, while using domain cloaking to obscure the “cashout sites” where the ads actually ran.

In 2019, Google moved to a first-price auction and also ceded its last look advantage in AdX, in part because it had to. Most exchanges had already moved to first price.

Thanks To The DOJ, We Now Know What Google Really Thought About Header Bidding

Starting last week and into this week, hundreds of court-filed documents have been unsealed in the lead-up to the Google ad tech antitrust trial – and it’s a bonanza.

Will Alternative TV Currencies Ever Be More Than A Nielsen Add-On?

Ever since Nielsen was dinged for undercounting TV viewers during the pandemic, its competitors have been fighting to convince buyers and sellers alike to adopt them as alternatives. And yet, some industry insiders argue that alt currencies weren’t ever meant to supplant Nielsen.