What is BMPL and how can it overcome media buying challenges?

Businesses face extra pressure on marketing budgets, leading them to explore new adspend management practices and ways to reduce cash flow risks.

Samir EL-Sabini, CEO & Co-Founder of Juni, explores the benefits of flexible deferred financial solutions that enable ecommerce businesses, in particular, to buy media and pay later.

The economic downturn and cost-of-living crisis has put massive pressures on businesses in all industries to compete for the attention of consumers. Online retailers, specifically, are struggling to find the balance of delivering the best customer experiences but also managing cash flow during these challenging times. 

Despite these headwinds, ecommerce businesses are still investing in advertising, especially ahead of peak retail moments such as in Q4 such as Black Friday and Christmas. The data on our platform shows that ecommerce companies spent 19 per cent more in Q2 this year than last, with 41 per cent attributed to advertising. Media buying clearly remains a key priority for ecommerce companies, perhaps due to higher budgets required to reach customers. However, many are struggling with a lack of flexible repayment terms and time-consuming processes that are negatively impacting running campaigns.

With the current economic backdrop looming fears over online retailers, they need to look for alternative ways to manage this increased adspend and reduce any cash flow risks. This is why deferred financial solutions that allow businesses to purchase goods and pay them back in installments over time are beneficial, especially those that enable businesses to buy media and pay later (BMPL).

The need for adspend management

According to Statista, revenue in the ecommerce market is expected to show an annual growth rate of 7.77 per cent. With this growth comes fierce competition as companies respond by lowering margins and pricing to compete. And as a result of this competition, advertising tends to be the main driver for companies to attract new customers and boost loyalty. It was reported that the ad business is predicting UK ad revenues to reach $49.4bn (£39.3) this year and expects the UK’s growth to reach 5.3 per cent in 2024.

However, due to the challenging business environment, companies are struggling to prioritise budgets. The latest IPA Bellwether report showed that the cost-of-living crisis, the economic outlook, and the need to focus on short-term sales are all putting pressure on marketing budgets. This means companies are having to make difficult decisions about how to allocate their marketing spend.

Consequently, there is a pressing need for ecommerce companies to explore new adspend management practices.

Challenges managing effective media buying

Yes, advertising is a key vehicle to help businesses unlock growth, but media buying can be quite a daunting task if businesses dont have the right processes in place. From missed or late payments and blocked cards to time-consuming admin that take time away from other critical activities, online retailers are having to worry about internal fears as much as the external ones. And as media buying can be a costly investment, it can put a strain on cash flow for ecommerce businesses.

Optimising cash flow management

This is why ecommerce companies are in critical need for alternative, flexible media buying options. But what sort of flexibility are they looking for – and does a pain-free media buying option exist? 

Online retailers should prioritise certain aspects when they’re looking for such media buying options, including:

  • Extended terms: Easing the pressure on cash flow cycles with financing that gives them extended days to repay.

  • Fixed fees: Charged fixed fees is vital for ecommerce businesses to manage payments as it allows them to pay fees based on the portion of funds they use only.

  • Integrating platforms: Finding a platform that allows smooth integration of ad platforms, such as Google and Facebook Ads, will save finance teams precious time by matching and settling invoices in a matter of seconds.

This is where products that enable capital for media invoices, like ours do, directly address the media buying issues retailers face and allow them to buy media and pay later (BMPL). That means ecommerce businesses don’t have to pay for their ads until they’ve truly paid off for them. 

Navigating turbulence with the right tools

It’s vital for ecommerce companies to find tools that allow them to better control their cash flow.

By automating tasks, online retailers can monitor their spend, gain insights into effective strategies, identify areas that need improvement, and make well-informed marketing choices for the future. There are tools out there such as BMPL that empower them to use their ad budget more effectively and efficiently to increase customer loyalty and reach more potential buyers. In the current climate, ecommerce companies should prioritise finance options that work for them – that help save time and resources, and boost cash flow so they can focus on what’s needed, enhancing the customer experience. 

Samir EL-Sabini

CEO & Co-Founder