Glam Media, the always interesting womens network (and now men’s network) is back in the news this morning.
Glam is both a direct publisher of content and an advertising network. A big part of their business model is float management – making sure that they collect money before they pay it out to partners. If they pay too soon, they could get hit with bad debt when advertisers don’t pay. Pay later, and they keep the interest they earn on partner money.
That’s why they’re extending the payment period to already beleaguered publishing partners. In a notice today, Glam blames the economy and extends payment terms from 60 or 90 to 120 days:
Dear Publisher,
Please be advised that to better prepare for the current financial situation, Glam anticipates a significant slow down in collection payments from advertisers. Therefore we will need to align the expected timing of payments from advertisers with the payments we make to our publishers. Accordingly, as of November 1, 2008 the revenue payments will now be scheduled on 120 day payment terms. However, in order to help minimize the impact to you and avoid gaps in payments, you will be paid as follows:
For publishers with 60 day payment terms:
Dear Publisher,
Please be advised that to better prepare for the current financial situation, Glam anticipates a significant slow down in collection payments from advertisers. Therefore we will need to align the expected timing of payments from advertisers with the payments we make to our publishers. Accordingly, as of November 1, 2008 the revenue payments will now be scheduled on 120 day payment terms. However, in order to help minimize the impact to you and avoid gaps in payments, you will be paid as follows:
November Revenue: 50% will be paid in January and 50% will be paid in February
December Revenue: 50% will be paid in March and 50% will be paid in April
January Revenue: 100% will be paid in May
Note: There are no changes in the amount you will earn or receive with this payment revision.We appreciate your cooperation and we will do everything we can to make the transition to the new payment schedule as smooth as possible.
This agreement will go into effect November 1, 2008.
For publishers with 90 day payment terms:Dear Publisher,
Please be advised that to better prepare for the current financial situation, Glam anticipates a significant slow down in collection payments from advertisers. Therefore we will need to align the expected timing of payments from advertisers with the payments we make to our publishers. Accordingly, as of November 1, 2008 the revenue payments will now be scheduled on 120 day payment terms. However, in order to help minimize the impact to you and avoid gaps in payments, you will be paid as follows:
November Revenue: 50% will be paid in February and 50% will be paid in March
December Revenue: 100 will be paid in April
January Revenue: 100% will be paid in May
Note: There are no changes in the amount you will earn or receive with this payment revision.We appreciate your cooperation and we will do everything we can to make the transition to the new payment schedule as smooth as possible.
This agreement will go into effect November 1, 2008.
Long payment terms are just business as usual with ad networks – it often takes our partner Federated Media six months or more to get us payment for ads served on TechCrunch. This is more of a sign of Glam’s ongoing transition from making guaranteed payments to publishing partners to a more stable and traditonal revenue share model. But for partners, it’s the equivalent of skipping 2-4 months of revenue as they wait out the new payment period. For some it will mean laying off writers and cutting other costs as the effects trickle down.
And I thought 90 days was bad… This is very amateurish.
Not as amateurish as those who are still writing for them.
If you wait 90 days or more for payment you are with the wrong ad networks.
Interesting, I think if I were a publishing partner I would call up my once-a-year-audit of the Brash.com expansion by Glam..
Also, especially interesting when you consider this article:
http://bits.blo...raffic-but-how/
How do you reconcile this jump in traffic recognition with the “slow down” of the economy? Seems very fishy to me….
I can tell you that they still pay the BEST CPM out there. Even much better than Federated Media. Michael, You should consider changing to Glam instead since they have Brash.com for men.
I’m sure the management of Glam Media have considered the revolt this behavior might ignite. I would terminate my relationship with the company if it is not going to pay me under the terms we set. Its like a marriage, six months into it you decide that you want to have other lovers, your spouse might not agree with you and see this a break in your agreement to put it mildly, depending on how much of a sweet talker you are will determine your future.
115 million funding and they are blaming the economy only in america.
this company is going down. we’ve seen behavior like this before. it normally desn’t end well.
“it often takes our partner Federated Media six months or more to get us payment for ads served on TechCrunch. ”
also, better cpms and sell thru
I would rather get paid on 120 days than not at all. I am a business women and I understand that companies have to adapt to the economy. If we don’t like it then we can leave. The alternative is not that appealing to me so I will stay put.
That sound like a bunch of trash to me. They are keeping money from the rightful owners of it for their own selfish investment scheme, or thats how i see it.
Visit P2P Tech Time
http://www.p2ptechtime.com
what a shitty ass sneaky company. get away from them.
wow, it takes federated media sometimes 4 months to pay you? that’s lame… publishers at BuySellAds.com can get paid as soon as we get paid… which is a few minutes before the ad goes live
I can’t say that I am very happy about this but i rather stick with these guys. They provide me with high cpm and I know for sure they are going to pay. I am getting paid in installments so luckly i will not miss any payments.
seriously? {seesmic_video:{”url_thumbnail”:{”value”:”http://t.seesmic.com/thumbnail/3A7kjxmllB_th1.jpg”}”title”:{”value”:”seriously? ”}”videoUri”:{”value”:”http://www.seesmic.com/video/qjySy3jm8M”}}}
So does this effect sites that Glam is also partners with? Will they also have to wait 120 or more for a payment?
Advertisers are paying at least net 120, if not longer. Don’t fool yourself if you think that Glam is floating the cash here, they are actually trying to reduce their risk. Because they are investing in growth and development of new properties and networks, they don’t have as much room to float the difference between ad collections and payments to their sites.
It is competitive pressure that will cause problems. The big issue is the other networks out there are trying to move to a longer time cycle anyway. This will just give more room for the other networks to move to a net-90 or longer. This is a bad thing for publishers, as it increases risk and also locks up your money.
There are not many other options for high CPM networks, that are going to pay you on anything inside a net-45 these days, and most are moving to net-60.
This is tough for us publishers, but after speaking to several other Glam Networks Publishers we understand why Glam is making this change. Because we see every Ad campaign they are running on our site, we get 100% information on how much money they are making for us. Talking to other publishers not on Glam there are a few things that are different:
1. Glam pays consistently much more than any other network. Highest CPM’s and highest revenue.
2. The quality of their ads is very good brands — this makes my site look more professional
3. They get special programs from advertisers for my site specifically
4. Glam shows everything they do to us — unlike Google AdSense and most other networks where you have not idea what was sold, for how much and when.
5. Glam has been paying us far earlier than the other networks- as Michael said, are typically all after they collect or 6-9 months. Campaigns run longer and are paid when they are done.
6. We TRUST Glam after years of working together — this is a group of people that are professional, ethical and consistent and really care for us.
7. This is a two-way relationship. Unlike most Ad-Networks where you can opt-in online and leave anytime you want. We have an exclusive and deep partnership that is unlike any other network.
8. Though the change is not easy, it is better that they are around and pay us as there is no other network that comes close to Glam for us Most of us are happy to be with Glam, looks like comments are from people who are not in the network.
9. We all know that the economy is slow, and are anticipating next year there will be many changes next year.
10. Last month — this October was the BEST EVER month from Glam for us in ads. So though the payments will be later, the amount is more than last year, and the installments means it has less impact. They just need to keep doing what they are doing.
Thanks Arianna! Why don’t you share us a link to your website? Is it Glam.com?
I can’t imagine anyone other than a Glam employee making a post like this! Shameful!
Not only that, but their CPM is about 1/4 what I make from Google Ads
And Google Ads is about 1/2 of what you’d make if you worked with advertisers direct on a CPA basis.
Networks like Glam, Federated etc, buy your inventory VERY cheap. Then give it to Advertisers for way too much. Work on a CPA basis and actually get paid for what your traffic is worth. It’s more work, but you’ll easily double your money.
This is a question for Michael as opposed to comments about Glam. It really takes FM up to six months to pay you? Are they that good that it’s worth the trade off not to have your own in house sales? Seems like they would be holding onto a pretty tidy sum for a blog the size of TC.
yes. but we don’t have cash flow issues, so it’s really just an issue of interest on the amount. Plus, I’m not so sure our bank is a better place to keep money these days…
Honestly I think 6 months is crazy, especially for TC. Arrington, you have more leverage than that. I think you need to renegotiate those terms, something along the lines of:
net 30
net 60 +2%
net 90 +4%
net 120 + 6%
Such lenient payment terms deserve some compensation. I can’t believe those Glam publishers would accept that. Those are the kind of terms that you get with low quality networks like Adbrite, etc. Those terms are just crap and you can find lots of other networks who will offer better terms. Much better terms.
Collection periods will increase as advertisers will take longer to pay. I think it is a valid reason to extend payment periods to publishers.
I have heard good things about GLAM and it seems to have good content and writers. I wonder if their advertising is similar to the ppc model or if it is based on page views with banner ads. FOr instance, with the SATC movie, nobody really clicked on the banners but the viewership of those ads helped bring awareness to the film.
Interesting move by Glam, but fairly expected. I’d really like to see how a down economy is influencing blogosphere payouts as a whole. Interestingly enough, more than ever, people are sitting at home on the internet as opposed to going out and spending money. Larry Genkin is doing something interesting with blogger and podcaster magazine, creating a publisher network consisting of smaller scale blog across many verticals. How will the current economic state influence his model?
Ryan
http://www.RawHideNation.com
Glam may be shady in a million ways, but as a blog network with the same float management issues, I can say that advertisers paying (especially through networks) is a major issue right now. Only automated networks like Adsense and Adify-based systems can completely be trusted to stick to payment terms in these economic conditions.
And it makes sense.. If I was an advertiser right now struggling to keep afloat, would I pay my employees or my outstanding ad invoice for ads I okayed to run before the economic crash? Um… not a tough decision. Sucks for anyone with inventory, though.
My 2 cents (coming from soemone who works at an ad network.)
– The point about bad debt is incorrect. Networks do not try and match up ad revenue to pub pymnts (or at least they should not.) This is too difficult given the many advertisers and many pubs (i.e., the definition of an ad network.) Instead, like Google a”technology fee” of about 15% covers this exposure, tho most ad networks do not charge this.
– I don’t buy that FM takes 6 mos to pay or more importantly they should not. Our DSO is in the 60s and agency pymnts average about 90 days. Having said that, my guess is that your pymnts from FM are delayed due to internal acctg issues. Regardless you should be paid according to the terms of your agreement (which I doubt is 180 days.)
– The biggest point is that Glam is doing this in preparation for a slowdown in pymnts and not as a result of an actual slowdown having already occured. Consider that logic. My company’s internal analysis expects a rise of about 10-15 days max as a result of worsening macro conditions. 30-60 days – punitive. But if pubs are happy w/high CPMs, then they will stay.
Interestingly, and somewhat distressingly, not all Glam publishers received the email notice that’s quoted in this post. I, for one, found out about the change only when I logged into my account on the weekend – after the new payment terms had already taken effect. This failure to communicate, frankly, concerns me much more than an understandable and no doubt necessary change in the business model under which the company operates.
I saw Glam come up over a month ago in this article and scratched my head: http://www.thes.../article/486446
Check out the chic in the photo who just signed over to Glam. Ive never heard of the site and after a visit you see how stale the content is, but, unbelievably hilary.com supports a staff of 30! Now brace yourselves, the site gets 60 millions “hits” per month. How does a site like this support itself through Glam??? I wonder what were they telling advertisers about their network.
No wonder Glam is imploding, I haven’t seen smoke like this in a looong while. I feel for them and understand that they want to keep their business alive by hanging on to cash, but their whole model is broken.
That’s Hilary-ous! I have to agree, they’ve got some real dogs with fleas in that network. Not sure whose measured hits in any meaningful way for over a decade. According to Compete, they get about 8,000 uniques a month. That gives a pretty good indication of that sites success even if their true traffic is double or triple.
I think Arrington should just fling Glam into the Deadpool. I can just look at them from the outside and can see they bleed cash and don’t have an ice cube’s chance in hell.
Woooooo!!! Let me waft my hand. Did I say dogs with fleas? Just checked out the sites in that article plus a bunch more sites in the Glam network. I feel more like I just checked the cat litter box after being gone for the weekend.
I only found out about this when I logged on.
Not a happy camper, we don’t have the same pageviews some of the social/gaming sites on the network have but we do have quality traffic (over 1 million US unique, not huge but enough to warrant more than an online message) and a site that sells to advertisers. We were already attractiing lots of advertisers directly with our previous network when we signed up.
Glam will have to tier their payment terms according to the site they need to keep, if they want to keep larger quality sites then they will have to stay competitive with likes of Gorilla Nation who pay Net 60 or Tribal Fusion (they do targeted sales now) who are faster still. They need to work out what sites on their network have high quality traffic and can generate ad deals on their own merit. Degrade the spammy sites, the filler sites and those with lower grade traffic like some Social or Flash Games sites. If they treat us all the same then they will lose us.
Glam seem to think Net 120 is normal and Net 60 is unusual. Whereas even for networks selling targeted traffic Net 120 is very unusual. If Federated are really paying out 6 months later then the publishers are crazy for accepting it, if they go under (it does happen) you will be stuffed for 6 months income. In ten years of running websites I have never come across Net 120 from a major advertising network.
Flexibility between publishers and advertsing networks, sure. Changing terms resulting in tens of thousands of lost dollars over a few months, with no notification or communication, nope.
Playing the blame game when it comes to marketing is a huge red flag. Whether you are behind the scenes running a advertising network, or right up front fighting in the trenches with your sales copy writing– there is no room for playing the blame game when it comes to marketing.
As the great marketer David Ogilv said many years ago and which is still relevant today, “It is important to admit your mistakes, and to do so before you are charged with them. Many clients are surrounded by buckpassers who make a fine art of blaming the agency for their own failures. I seize the earliest opportunity to assume the blame.” – David Ogilv
I am a former Glam publisher and I am glad I left. Glam pays on CPC not impressions, so even though I have terrific traffic, I never made more than $250 a month. Now that I am with a new ad network, my payments have doubled. Oh and another thing, when I asked to be let out of my contract with only a few months left, they refused. When I protested they threatened to sue me. Nice.