• by Joe Mandese  @mp_joemandese, November 30, 2023

Mixed economic signals continue to cloud the visibility of the near- and long-term advertising marketplace, including just released data from OAREX Capital Markets showing a rise in the percentage of digital media payments that are made late or are underpaid.

The data, the first of a new quarterly snapshot developed by OAREX for MediaPost, complements its more granular semi-annual reports, and does not break out payments made by agencies vs. the programmatic supply chain, but it shows that the demand-side overall is keeping its cash close to its vest.

"We can't pinpoint causality with our data but believe a combination of factors are at play and influencing a higher frequency of late payments from demand partners. These factors include cash flow management, reducing their carrying costs for capital and risk mitigation," explains OAREX Executive Vice President Nick Carrabbia.

In terms of underpayments, Carrabbia notes that they rose to an all-time high (21% of all payments) during the third quarter, which he attributed primarily to "recent industry bankruptcies and the resulting sequential liability that rippled through the supply chain."

While it's unclear whether the media payments data is a lagging or leading indicator of advertising economy, recent data from Guideline's and MediaPost's U.S. Ad Market Tracker has shown monthly increases in ad spending, and this week, influential ad market analyst Brian Wieser upgraded his ad growth forecasts for 2023 and 2024 by nearly a percentage point from an earlier forecast released in September.

On Monday, the Big 3 agency holding company forecasting units -- IPG Mediabrands' Magna, WPP's GroupM Business Intelligence, and Publicis' Zenith Media -- will release their year-end forecast updates.