Gross Profit Margin

Gross Profit Margin is ultimately the most critical metric to be tracked within your media company. Managing media costs through dedicated resources who directly interface with the buy side (publishers) and build relationships to gain exclusive access to digital inventory where advertisements are placed is one key strategy to optimize margins. Subscription direct-to-consumer offerings in the media space have also become more popular due to its production of steady and predictable revenue streams.

  • 24.8%
  • 31.4%
  • 48%
  • 57.8%
32% Hiring New Skillsets/Employees Source: Folio, NetSuite
"Data and analytics are at the heart of everything that we do.”"

— Patrick Knight, COO DWA Media

Days Sales Outstanding

Days sales outstanding represents the average time it takes a media company to receive payment from its customers, typically advertising agencies. Advertisers typically pay their advertising agencies based on when the agency plans to pay for media. If agencies receive timely payments from their clients, then media companies can receive timely payments as well. Because your goals are aligned with the agencies, work with them as partners to achieve a healthy DSO. One strategy is to use electronic payments that can be sent to your customers immediately after a campaign is completed. A quick and efficient invoice production process can lead to faster payments.

  • 109 days
  • 72 days
  • 59 days
  • 46 days

Revenue Growth

The digital age has introduced new, more immersive and on-demand technology, changing the media industry permanently. To stay afloat in today’s competitive media landscape, revenue growth is dependent upon introducing new and innovative revenue streams that go beyond traditional platforms businesses may be accustomed to. Many media agencies are still relying on legacy media revenue streams, while others have embraced the change, introducing new sources of revenue like subscription services, live events, memberships, etc. Revenue growth is a key metric that differentiates the companies that are on the forefront of these changes from the companies still depending on outdated models.

  • 0%
  • 3%
  • 8.6%
  • 14.1%
Foundational
Competitive
Best in class
Transformative

Revenue
Growth

0%

3%

8.6%

14.1%

Revenue
Growth

This metric indicates the rate at which your company’s total revenue is growing.

Gross Profit
Margin

24.8%

31.4%

48%

57.8%

Gross Profit
Margin

Percentage of revenue after cost of goods sold. This metric signifies how efficiently your company uses its resources to deliver media profitably. The higher the percentage, the better.

Days Sales
Outstanding

109 days

72 days

59 days

46 days

Days Sales
Outstanding

How many days, on average, it takes your clients to pay invoices. The lower this number is, the better. Also called DSO or Days Receivable, it is a financial ratio that illustrates how your receivables are being managed.

Days Payable
Outstanding

31 days

72 days

100 days

128 days

Days Payable
Outstanding

How many days, on average, it takes your company to pay your suppliers. Also called DPO or Days Payable, it is a financial ratio that illustrates how your payables are being managed.

Invoice
Generation

> 2 days

2 days

1.7 days

1.3 days

Invoice
Generation

This metric indicates how many days on average it takes your media agency to process an invoice, starting from the time source data is collected to the time that an invoice is in the hands of your client.

Finance FTE per
$50M Revenue

> 3.5 FTE

3.5 FTE

2.7 FTE

1.8 FTE

Finance FTE per
$50M Revenue

A calculation of how many FTE (Full Time Equivalent) Finance department resources are required for each $50M in revenue earned.

SG&A Expense

38.2%

23.5%

19.1%

14.7%

SG&A Expense

General and administrative expenses as a percentage of sales. General expenses for a media company include management expenses, marketing, overhead, etc. The cost of creating and producing media should not be included here (those are considered Cost of Goods Sold). The lower this percentage, the more efficient the company.

IT FTE Per $50M
Revenue

> 4 FTE

4 FTE

2.9 FTE

1.8 FTE

IT FTE Per $50M
Revenue

A calculation of how many FTE (Full Time Equivalent) IT department resources are required for each $50M in revenue earned.

Source(s): Finlistics

Parameters

Foundational

Your business may just be beginning to track this metric, perform this business function or identified this as a problem. Improved execution in this area should be a high priority.

Competitive

Your business is competitive in this area, but there’s still room for advancement. Consider investments to improve related operations to achieve better results.

Best in Class

Your performance in this area is considered best in class and is superior to the average company in your sector. You’ve laid a solid foundation in this business function, and the next step is optimization.

Transformative

You’re achieving the optimal results for this metric. Your business processes in this area are highly efficient and stand out against competitors. Keep investing in this area to maintain these results.