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Sector

Paid media and performance agencies

A performance agency pays Meta, Google or TikTok while a client's campaign runs, then invoices the client, who settles on 30, 60, sometimes 90 day terms. The agency isn't waiting to be paid for its own work. It's waiting to be reimbursed for money it has already handed to the platforms, every month, for every client running live media.

Tell us what's happening How money moves in this sector

How money moves

The platforms get paid before the client does

The float is the time between the agency paying for a client's media and the client paying the agency back. As an illustration, a £60,000 monthly budget run on 60 day client terms leaves roughly two months of spend, around £120,000, funded by the agency at any given moment.

Media spendPaid out

  1. Campaign goes live
  2. Platform charges the agency's card, or invoices it on credit terms
  3. Paid while the campaign is still running

Client billingIncome

  1. Media and fee invoiced to the client
  2. 30, 60 or 90 day terms
  3. Agency reimbursed

Running the agencyCosts

  1. Payroll
  2. Tools and data
  3. Office and overheads

The agency carries the difference: media paid on the platform's timetable, reimbursement arriving on the client's, with payroll due in between.

Platform credit terms narrow the gap rather than close it. Google Ads, for example, offers monthly invoicing only to established accounts that meet spend and history criteria, with payment terms typically of 30 days, which still sits inside a 60 or 90 day client term.

Where the sector gets misread

What a generalist lender sees, and what's actually happening

What a generalist lender readsWhat is actually happening

Large turnover on a thin margin

Gross billings include the full media spend, most of which passes straight through to the platforms. The agency's real income is its fee, and its margin on that fee is a different number entirely.

Client debtors as ordinary trade credit

The receivable is reimbursement of cash already paid to a third party, so the exposure is the client's payment reliability plus the agency's own platform obligations, not a delivered-service invoice.

A profitable business that shouldn't be short of cash

Winning a bigger client widens the float before it adds any fee income, so fast growth and a cash squeeze arrive together.

The measure that matters

Fee income, not gross billings

The useful numbers are what the agency actually keeps once media is stripped out, and how much media spend is outstanding at any one time. Together they show the real business and the real size of the gap.

The largest agency groups report it this way themselves. WPP, for example, reports "revenue less pass-through costs" alongside revenue because media it buys for clients has to be accounted for as revenue even though it passes through (WPP interim results 2024, Appendix 4).

Where finance fits

Usually a credit line that moves at the speed of the spend

Your situationUsually fitsNot this
Recurring media float across the client bookA credit line sized around the spend cycleA term loan sized on net profit
Campaigns run and invoiced, with client invoices outstandingInvoice financeTrying to fund spend that hasn't been invoiced yet
One or two large clients driving most of the gapSelective invoice finance against those accountsWhole-ledger discounting on a concentrated book
A late payer is still a late payer, however well the media float is funded.

If one client is consistently stretching its terms, the better fix is often the contract: media paid upfront, shorter terms on media than on fees, or the client paying the platform directly.

Sources

Where these points come from

Talk it through

Need another perspective?

Describe where things stand in a sentence or two: who pays, how, and where the gap sits. We'll tell you whether it's something we can help with. There's no charge for this.

Your enquiry is read by a person at Established Finance, not a call centre or an automated queue. We use it only to work out what's likely to fit and reply to you. We don't share your details with anyone else unless we introduce you to a specialist partner, and only with your agreement at that point. Sending this doesn't appoint anyone or create a professional engagement, and there's no obligation at any stage. See our privacy policy.

What happens next

  1. A person on our team reads it against how businesses in this sector are actually paid.
  2. If we can help, we introduce you to a specialist partner we have vetted and tell you who they are.
  3. No charge and no obligation at any point. You decide whether to go further.
Adam Parker

Adam Parker

Founder of Muswell Rose Consulting Ltd, which trades as Established Finance · former Managing Director of Penny, an invoice finance business, with 15+ years across mortgages, commercial finance and fintech lending.

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Practical questions

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What information do I need?

To start, just a description of what’s actually happening in the business. If it progresses, the specialist partner will ask for the usual things: recent accounts, a sense of turnover and trading history, and details of the specific need.