Recently chatter in the industry has brought to light the problems facing the once mighty Impulse Marketing Group. The company, once a mainstay in the industry seems to be facing significant financial distress. Several networks have expressed frustration in being unable to be paid by the company for months, taking to even Facebook to attempt to get paid.
The issue of cash flow in the performance marketing field is often a difficult one. As many affiliates and networks require aggressive terms, often weekly payments, on missed payment by a client can often put agencies and advertising into a difficult situation. Confidential emails between Impulse MG and a network suggested that Impulse was looking for a solution, but needed better cash flow in order to repair their debt issue.
Often as companies, similar to Impulse, face issues with cash flow, they start to pay their vendors slower and slower. While this can temporarily fix issues, long term it’s not a good plan. As the debt builds up more and more vendors are unlikely to continue running advertising, causing more damage to the cash flow. Some companies seek financing at this point, loans or factoring companies that will pay them earlier on invoices.
However, most companies facing this issue follow the path where they try to get more affiliates and networks to run their offers, in order to improve cash flow. This is usually problematic because getting paid by Peter to pay Paul is a poor solution and can be considered fraudulent. It means that the business knows they are in trouble, but “buying” media and using the profits to pay someone else. This method, if it can be proven that there was knowledge of this, can lead to criminal charges.
We attempted to contact Impulse MG, but emails were not responded to.