No business has been immune to the digital push brought on by the pandemic, and B2B companies have taken note.
With a growing demand for alternative payment options, businesses around the world have turned to their service providers for action. Early adopters were digital advertising companies, and PYMNTS search shows that over 68% of these companies are now using automated technology to prioritize expense recovery.
Most businesses have noticed the benefits of digital payments and have innovated accordingly, and 71% reported improved collections as a result of accounts receivable (AR) automation. Yet while B2B automation capabilities are superior to existing systems, several sticking points still exist within the technology. Advertising agencies only take 11 days to keep track of collections, for example, but the average overdue sales days (DSO) rate for all other businesses is 42.5 days. B2B organizations can integrate tools like virtual cards to combat this problem and further streamline the process.
In the B2B Advertising Payments Report, PYMNTS examines how B2B advertising companies can update their existing payment systems and use electronic payments to increase revenue, reduce friction and improve customer experience.
Around Payments in the B2B Advertising Space
A change in the way B2B companies advertise their products and services has occurred over the past 19 months. Now, advertisment display is expected to reach around $ 5.1 billion for B2B organizations in the United States in 2021, a 33% increase from $ 3.8 billion in 2020. Reports show that technology products and service providers were in the highest spending bracket for B2B digital advertising in the United States this year, totaling 32%. of all sales. Financial services were second in terms of spend, accounting for 25% of display ad spend and B2B search.
B2B cross-border transactions are expected to exceed $ 42.7 trillion in value by 2026, an increase of approximately $ 8 trillion from 2021. Wire transfers account for 70% of transactions in space and are expected to reach 80% by 2026. B2B cross-border payment providers aim on payment automation processes, as legacy payment options are often slow and difficult to track to completion. Research suggests that payment providers should provide businesses with a range of user-friendly methods, such as virtual cards, to compensate for the current weaknesses of cross-border instant payments.
Travel restrictions and border closures have disrupted the workflow of many businesses. Despite this, B2B cross-border payments are expected to continue on their upward trajectory, with a report predicting a 14% increase in such transactions from 2020 to 2021. A significant segment of B2B companies intend to prioritize investments in e-commerce migration by 2023, and over 80% of global B2B leaders said it was critical to start omnichannel investments by 2023. The B2B market generally lags behind other sectors in the space payments when it comes to digital transformation, but the accelerated adoption of the technology during the pandemic has motivated many market leaders to re-evaluate their approaches.
To learn more about these and other stories, visit the News and Trends report.
BidVertiser digital advertising platform expands market reach with automated payments
Before the pandemic, businesses could get by with old payment processes, such as cash, paper checks, and even debit or credit cards. Since then, the accelerated adoption of electronic payments has created a demand for alternative payment options that customers expect from their suppliers of goods and services. B2B companies are no exception, and digital advertising companies were among the most willing to embrace new payment technologies.
To learn more about why digital advertising companies and other B2B businesses should combine digitalization of their Accounts Payable (AP) / AR processes, visit the featured report.
Deep dive: Advertising companies have a lot to gain from the digitization of B2B payments
The B2B space is feeling the influence of the switch to digital payments brought on by the pandemic, and many organizations are now recognizing the list of benefits that digital B2B payments technology has to offer. Some of the main advantages of digitization legacy systems are cost savings when distributing funds and better predicting payment times. About a third of U.S. businesses still use obsolete systems and cash or paper checks to complete transactions, which can create friction and delay payment processes.
To learn more about how automated AR processes can reduce delinquency rates and DSO, visit Report’s Deep Dive.
About the report
The B2B Advertising Payments Report, produced in collaboration with American Express, provides coverage of the latest news and trends regarding advancements in digital payment strategies for B2B advertising agencies and other B2B businesses.