How to Avoid Another Sizmek

In the wake of the Sizmek bankruptcy, we released our 4th digital media payments study. The Q1, 2019 report covers 4,000+ invoices. We bought these invoices from digital media firms - websites, apps, podcasts, SSPs, exchanges, agencies, marketers and new-age platforms.

You can find a link to your free copy of the report below – no email necessary (tho we might stalk you on Facebook).

In light of recent events, we added Best A/R Practices for digital media to help avoid a loss from another Sizmek blow-up (see page 11).

Run Through This Checklist to Avoid Bad Credit Partners

Lots of publishers felt the sting from Sizmek because the major SSPs didn’t pay them after Sizmek didn't pay the SSPs. So here is quick summary of tricks you can employ when looking for new demand partners, to prevent future “seismic” losses.

• Ask for credit references to make sure they pay on time. If you want something more candid, check out the Adops subreddit (no one introduces a reference that will have negative things to say!)
• Look for a sequential liability clause and ask that it be removed (more on this below).
• Check Glassdoor for management reviews. We have a theory – if you see mismanagement in one area (i.e. with labor), you can expect it with cash flow.
• Make sure they have a U.S. presence. This way you have a better chance at recourse if they don’t pay you.
• Check Crunchbase to see how well they’re capitalized.

Sequential Liability: How It Screws Publishers

A sequential liability clause basically says “if I don’t get paid, I’m not paying you”. All the major SSPs have this clause in their contract. This basically absolves them any duty to check credit for their demand partners on the other side (i.e. Sizmek).

So who eats the loss? Publishers. Sequential liability clauses push the loss from irresponsible credit decisions onto the publisher.

Why should the publisher take that risk?

Download our full report here, including:

• Data Appendices with 10+ charts/graphs (pgs. 12-15)
• Best A/R Practices (see page 11)
• Full chart of payment performance by ad network (page 10)