What Is Net +0 Payments?

What is net +0 payments?

Net +0 payments means that Network pay they invoices the same day that they are generated. They must process publisher invoices on the first business day of the month for the month prior. This means that if May 1st is a business day, publisher revenue generated in April will be processed and paid on May 1st.

Ad networks commonly offer Net +30 and Net  +60 payment terms, meaning that publishers will receive revenue payments either 30 days or 60 days (respectively) after the close of the billing cycle, usually the end of a calendar month. This results in longer cash cycles and a delay in putting your capital back to work. This can make a significant difference in the rate of growth.

For example, if you have advertising capital of $6,000 and you are receiving payments on a net +30 basis, you have an advertising budget of $100 per day. For simplicity, let’s assume that you make 100% on your advertising budget ($2 revenue is generated for every $1 in advertising). At the end of 60 days you will receive the revenue generated during the first 30 days of your advertising budget, which in our example is $6,000. This money is available for the next 30 days of advertising at $200 per day. At the end of 60 days you will receive the revenue generated in the last 30 days of your original investment and can continue spending $200 in advertising. The graph looks something like this:

chart_2

In contrast, net +0 payments allow you to invest your $6,000 at $200 in advertising per day. Using the same assumptions as the net +30 scenario, this results in $400 in revenue generated per day. At the end of 30 days, invoices are processed and all your revenue is available for re-investment in advertising for the next 30 days at $400 per day. The results look something like this:

chart_1

In comparison, your $6,000 initial capital results in $12,000 cumulative revenue for net +30 payments, while net +0 payments result in $36,000 cumulative revenue – three times the amount of net +30!

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One Response to "What Is Net +0 Payments?"

  1. Time Value says:

    Its true, Time value of money is very high in advertising industry. Thats why i hate net 30 net 60 payment. I prefer to work with weekly or biweekly payment.

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