Releasing the handbrake on UK ad tech

The UK's ad tech sector is a true powerhouse. A vibrant hub of innovation and creativity, that contributes £129 billion to the economy, supporting millions of jobs and fuelling global competitiveness. 

Yet, beneath this incredible success lies the crippling issue of extended payment terms. Under the pandemic, increased terms became commonplace, dragging payment windows out to 120 days or more but ongoing crises have kept this trend alive.  

Whilst the UK government launched the Prompt Payment Code, today, lengthy payment terms continue to create a stranglehold on cash flow, hindering our growth, and stifling the very innovation and buoyancy that define our industry. It’s time to release the handbrake holding back UK PLC.  

This isn’t just a minor inconvenience; it’s a systemic problem that is widespread across the entire ecosystem and that has far-reaching consequences and threatens the industry’s very future. Slow payments are impacting all players within UK ad tech - everyone, from the larger publishers to small SME affiliates is impeded in progress and growth and this is not to be played down.  

Particularly younger UK publisher businesses, who are full of innovation and promise are particularly vulnerable, being unfairly disadvantaged and struggling to continue business under this funding bottleneck that threatens their very survival. Furthermore, it’s putting UK businesses at a distinct disadvantage against our better-capitalised US counterparts.  

Whilst the UK government emphasises the importance of the digital economy for future growth, we saw just last week that the Bank of England has halved its projection for 2025 growth. Something has got to give - we must address these financial constraints that threaten the vitality of this crucial sector. 

The IAB UK's own research underscores the importance of a healthy ad tech ecosystem. Yet, the current payment model actively works against this goal and the current economic climate only exacerbates the problem. As businesses navigate uncertainty, efficiency and transparency, predictable cash flows and financial stability are paramount. But how do we tackle this issue head-on?  

Fostering sustainable & equitable ecosystems for all 

The concept of "net zero" payment terms in UK ad tech is now crucial. Agility and financial stability are paramount in the fast-paced world of programmatic advertising and affiliate marketing. Quick access to capital allows companies to react swiftly to market trends, optimise campaign performance and ultimately deliver better results for clients. It fosters a virtuous cycle, where companies can reinvest in data analysis, technology and talent acquisition, further driving innovation and growth. 

Extended payment terms create a bottleneck, hindering revenue and return on spending, which in turn limits the ability to reinvest. Imagine a promising new targeting strategy emerging mid-campaign. With slow payments businesses may lack the immediate capital to implement these changes, potentially missing out on valuable opportunities and impacting campaign performance. 

A growth watershed moment & strategic imperative for ad tech 

The need for change is clear. The industry must move towards a "net zero" approach, eliminating unnecessary payment delays and ensuring that revenue is paid promptly when due. This isn’t just about improving cash flow; it’s about fostering a more sustainable and equitable ecosystem for all.  Furthermore, with improved cash flow, the entire ecosystem will be able to reinvest more in the industry, driving innovation and growth that benefits publishers, affiliates, technology providers and ultimately, clients too.  

This is not simply about delivering a healthier financial practice; it’s a strategic imperative. Faster payments are essential for unlocking the full potential of publishers, affiliates, agencies and networks alike, and ensuring that UK ad tech can compete on the global stage. Only through this can we empower ad tech businesses to be more responsive, creative and ultimately, more successful. This translates to increased client satisfaction, stronger client relationships and a more dynamic and competitive industry as a whole. 

The challenge now is to translate this understanding into action. The industry needs a collective commitment to shorter payment terms and a willingness to explore the innovative solutions that are now available and that facilitate instantaneous access to funds. This includes leveraging smart technology to automate payment processes, implementing standardised payment protocols and exploring new and innovative financing models that address the specific needs of the ad tech sector. 

UK ad tech has the potential to be a great global leader. But to achieve this potential, we must address the issue of extended payment terms head-on. By embracing a “net zero” approach and fostering a more equitable financial ecosystem, we can unleash the powerful innovation of UK creative and the productivity, and growth that will drive the industry forward for years to come. It’s time to remove the financial shackles and empower UK ad tech to truly thrive and drive forward.  

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Revving announces today a landmark £107 million investment today that will provide a vital injection of £1.8 billion in capital UK ad tech, that could have a 4.8x multiplier effect, generating an £8.6 billion boost to the UK economy. For more information please see Revving.