Finance is the new creative: Balance-sheet crunch leads ad and media businesses to seek new liquidity avenues

Digiday 31 Mar 2020 04:01

This is the second of a weekly column about the big changes and challenges facing media and marketing leaders. Be sure to join Digiday+, our membership program, to get access to this column and all Digiday articles, research and more.

First came the shock. Then came the bills.

Eager to maintain positive free cash flow as the coronavirus crisis enters a new month, every publisher or agency CFO is looking to prioritize two things: 1) Ensuring clients pay up any outstanding bills as quickly as possible. 2) Moving fast to pare down the bills flowing out from their own businesses — or finding a way to kick those cans down the road.

The pressure is on. An Interactive Advertising Bureau survey of 400 decision-makers at advertisers and agencies conducted last week found almost a quarter (24%) are pressing pause on all their ad spend for the first and second quarter of this year. Between March and June, “digital” spend is expected to drop by 33% and spend on “traditional media” is predicted to fall by 39%, according to the survey. Agency leaders are preparing for revenue hits of anywhere between 30-50% this year, according to a senior U.K. agency source who declined to be named in this piece.

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Interactive Advertising Bureau
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