Money & metrics · also called Net 30, Net 45, Net 60, payment terms
Net payment terms (Net 30/60)
Net payment terms state how many days after a period ends a payment is due; Net 30 means payment about 30 days after month end.
"Net 30" on a contract means the payer settles roughly 30 days after the end of the month in which the revenue was earned. Net 45 and Net 60 push that further out. Some arrangements pay faster, weekly or twice a month, usually in exchange for a fee or a lower revenue share.
In search arbitrage terms matter because money flows out before it flows in. Traffic is paid for immediately or within days, by card or on short agency invoices. Feed revenue arrives later. A direct Google AdSense account, for example, finalises a month's earnings in the first days of the next month and issues payment in its third week. Feed providers set their own terms by contract, and they vary.
Terms therefore decide how much working capital a business needs and how fast it can grow. They also carry risk: a provider that pays late, or holds payment during a traffic-quality review, can leave an operator who has already paid for the traffic badly exposed. Read the payment and withholding clauses before sending volume.
An example
Say you spend $1,000 a day on traffic throughout March. On Net 30, March revenue arrives around 30 April. You have funded about $31,000 for March plus $30,000 for April before the first payment lands: roughly $61,000 of cash tied up.
Related terms
Cash-flow float
Cash-flow float is the money an arbitrage business must fund between paying for traffic today and receiving the matching feed revenue weeks later.
Working capital
Working capital is the cash a business needs to cover day-to-day costs between paying its suppliers and being paid by its customers.
Credit line (ad spend financing)
A credit line is borrowed money, from a bank, card, lender or the ad platform itself, used to pay for traffic before the feed revenue arrives.
Finalised revenue
Finalised revenue is the confirmed amount a feed will actually pay for a period, after invalid clicks and other adjustments have been deducted from the estimate.
Feed provider
A feed provider is a company that holds a search ad contract with Google, Microsoft or Yahoo and lets smaller publishers use it in return for a share of revenue.