How credit lines work in the mobile ads industry

Martin Macmillan
5 min readJun 8, 2023


The mobile ads ecosystem is maturing fast thanks to the recent spate of consolidations over the last few years. But with many economies on the brink of recession and a massive slowdown in the tech sector, the focus is on delivering profits for shareholders, rather than growth at all costs. In this environment of enhanced scrutiny, we look at how the ad networks are thinking about credit risk and the billions of dollars of unsecured trade credit they provide to advertisers at any point in time.

Firstly, let’s understand the process of how the large advertising networks provide credit facilities to their advertisers, and their motivations to do so. The provision of credit facilities is to make advertising on their network more attractive so that, at a certain stage, the publisher graduates from pre-paying on credit cards to a post-pay invoicing arrangement. This improves the cash flow of the studio and is generally thought of as a way to keep them spending, and deepening the relationship.

Ad networks are understandably cautious about providing credit in the early days of a publisher’s journey. They are not in the business (nor should they be) of taking unsecured credit risk on early stage companies, and take the understandable view that any form of credit facility has to be “earned” over time.

Advertisers start off on credit cards with daily spend limits — typically small limits charged sometimes several times a day — to minimize fraud and potential for money laundering.

Depending on your relationship with the network and your spend history (as well as other factors including app/game genre, jurisdiction, etc.) you may be invited to apply for a credit line after reaching a target level of consistent spend over a period of time which makes it worthwhile for the network to manually diligence the advertiser. In order to successfully apply for a credit line, the publisher will need to meet certain criteria (e.g. trading record for more than 12 months), and submit financial documents including bank statements, tax returns, evidence of equity raise, etc. The credit approval process is very manual and carried out in a very traditional way which leads to bottlenecks and inefficiencies.

A credit limit will be allocated, which will typically start small and be reviewed over time as the line of credit is used, and most importantly paid off on or before the due date so as not to fall into arrears. Applications to extend the credit limit are normally made via account managers, but sometimes increased automatically depending on the network.

When do the bills need to be paid?

Most networks offer Net30 payment terms, meaning that the bill for the UA needs to be paid at the end of the month after the ads are served. In some cases the publisher may be able to extend this to Net60 days, but only at substantial spend levels where they have a lot of leverage.

Finance managers juggling the cash flows of the business also need to factor in the payment delays of the platforms (both for IAP and Ads). Payout terms can be as short as Net15 (15 days from the end of the month — average 30 days) to as long as Net60 (60 days from the end of the month — average 75 days). They are constantly performing a juggling act to make sure their UA bills are paid on time to pay down the credit facility from the revenues earned, taking into account the payout delays. In order to smooth these cash flows, more sophisticated finance teams use a revolving credit facility, such as those provided by Pollen VC, to smooth their cash flows and enable them to sustain their growth objectives whilst maximizing the use of their “free” credit facilities provided by the ad networks.

How do they decide the size of the credit facility?

Essentially, due to this very manual approach to allocating credit lines and monitoring creditworthiness they are providing unsecured trade credit based on imperfect and outdated information. The ad network has no insights into the ongoing financial health of the business, and is therefore flying somewhat blind when it comes to the amount of credit to extend on an ongoing basis.

Publishers who have found a formula for ROI positive user acquisition are constantly seeking larger credit lines, and longer payment terms and this is a constant source of internal conflict within advertising networks. Account managers are trying to convince their internal credit teams to increase limits and extend payment terms (so they get extra commission) whilst credit teams are trying to prevent losses (so they don’t lose their jobs!)

Cohort data is key

It’s important for publishers to look through the headline figures and understand what’s going on behind the scenes. In order to do so they must look at how and when revenues are generated and cash is paid — essentially analyzing cohort behavior — to really understand the financial dynamics.

User cohorts on f2p games or subscription apps will monetize fairly predictably over time. UA managers will be focused on the P&L — the daily check-in to see how much revenue has been generated the previous days, edging towards the milestones of ROAS breakeven, and ultimately recovering the expected lifetime value (LTV) of the user. But the finance teams will be more concerned with whether the cash actually hits their account.

Any finance team running their operations based on headline cash flows rather than cohort level is more than likely missing a growth opportunity if their underlying metrics are good.


Until ad networks raise their game and figure out how to use the financial information widely available to them to evaluate credit risk in a much more dynamic way, structural inefficiencies in the ecosystem will continue to persist. This hurts not only their own ads business, but also curtails the growth of app and game publishers and their ability to maximize the opportunities available to them using paid UA channels.

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Martin Macmillan

CEO & Founder at Pollen VC - London, we provide devs early access to revenues earned from the app stores so they can rapidly reinvest