Glam Media, a women’s (and men’s) site publisher and ad network has finally joined the club of delaying payments to the publishers like others in the business. With the financial slow down and plunging ad revenue, Glam like everyone else has taken measures to shore off their finances as well. Glam will implement a different payment schedule and extend the time from 60 or 90 days to 120 days to the publisher due to the significant slow down in the collection from the advertisers.

Like traditional form of media, the advertisement first runs with the publisher, and then the advertiser receives the bill, which is paid to the agency they work with. Finally the publisher gets their payment. In case of ad network, the agency gets a check from the agency then the publisher who ran the ad gets paid.  The system of payment works on float management. In simple words, it means collecting the money before they pay it out to the partners. Everyone wants to hold on to their money for a bit longer to enjoy the interest they can earn on partner’s money.

With this new transition in Glam, a rippling effect will definitely be seen with the loss of 2-4 months revenue for the partners. The writers will have to bear the brunt as well. Layoffs and other cost cutting measures are bound to happen sooner than anticipated. Although the publishers may take an offense, they are more likely to stick to Glam, which makes payments on 3-4 month basis where as other networks, do on 6-7 months basis as the economy is facing a real recession and during this crisis time all big networks are finding ways for their own survival. It would be interesting to study how the writers would actually react.

Via TechCrunch