• by Joe Mandese  @mp_joemandese, August 20, 2024

While late payments haven't bottomed out yet, they have reached a plateau, according to the most recent semi-annual tracking report on digital media payments released this week by OAREX.

While the percentage of payments made late by media debtors including advertisers, agencies and DSPs have fallen to 76% in the first half of 2024 -- the lowest percentage since the second half of 2021 -- OAREX Executive Vice President Nick Carrabbia said the most meaningful signal is the percentage of media payments made 15 days or later.

"Late payments are relatively accepted in this space," he explains, adding, "but 15 days or more is a true signal. When you start seeing two weeks late consistently, that tends to be indicative of a broader problem."

The percentage of payments made more than 15 days late rose to 11% during the first half of this year, up from 8% in the previous half, and near recent marketplace highs.

The percentage of payments that were underpaid also remained near recent highs, though the first half's 15% was down from the previous half's 20%.

That said, Carrabbia said OAREX has detected an improvement in market sentiment, and the continuing high level of late payments in the first half may be more of a lagging indicator than a leading one, as the digital advertising marketplace continues to adjust to defaults and bankruptcies, as well as sequential liabilities, from a year ago.

One potentially troubling signal for advertisers and agencies is that their manual media-buying demand worsened during the first half, while programmatic media buys saw improvements:

• 55% of all manual payments were late (a 6% increase from H2 2023), and 24% were more than 15 days late (a 5% increase).

• 42% of all programmatic payments were late, down from 44% in H2 2023.