Revenue is based on media spend delivered in a particular month. Overall, revenue is not recognized for amounts that are not delivered or amounts delivered above the contracted amount. That's where revenue adjustments come in.
What is a Revenue Adjustment?
This is an entry to either increase or decrease revenue based upon new data; thereby either increasing or decreasing cash amounts. Following the end of every month, our accounting team makes an adjustment to the revenue for that month. The adjustment is based on what was actually served between the start and end date. These numbers are typically not finalized until the 15th of the following month.
Example Revenue Adjustment
🚧Figures are not final
There is a disclaimer in the reporting dashboard to indicate the most recent month that has posted finalized adjustments. (ie. *Figures after July 2019 are not final).
Why do Revenues need to be adjusted?
In accrual accounting, revenues are entered when they are earned, not when you are paid, and expenses are entered when they are incurred, not when you pay them. Before the end of the accounting period, adjustments are made to bring the accounts up to date. The revenue reporting will be correct for the month prior as long as the month is "closed" meaning adjustments are complete. An adjustment will appear as a negative line item within the report. The adjustment process for a given month is usually completed near the 15th of the following month.
When might Revenue Adjustments happen?
There are a few reasons adjustments can occur, but most often it is the result of feedback from the 3rd party verification we submit all impression data to. The analysis of impression data is an industry norm and can take several weeks or more in some cases. Payments are made to publishers at the end of each month, but adjustments are not (can not be) made until data is validated. The adjustments are made upon receipt, not post-dated. As such, negative values could be the result of media which ran multiple months prior.
📘Did you know?
Adjustments will post within reporting based on when the information is received and will typically be reflected AFTER the month has been closed.
How do you identify a Revenue Adjustment?
There are some key things to look out for when understanding a Revenue Adjustment. Various factors can contribute/identify causes for Revenue Adjustments. Adjustments can be based on the "closing of the month" process and/or third-party platform data.
Viewed in reporting, adjustments are negative values and occasionally have "N/A" listed in some fields like geo or "Other" device type. Specific use cases also show that campaign setup, changes within the campaign, and over-delivery can also contribute to possible Revenue Adjustments. It is important to note that the adjustment process takes place AFTER the month has completed but can also be reflected even months later.
📘Why and When are Revenue Adjustments made?
Most often adjustments are made because of feedback from the 3rd party verification. The analysis of impression data is an industry norm and can take several weeks or more in some cases. Payments are made to publishers at the end of each month, but adjustments cannot be made until data is validated. This can be reflected a couple of months after a campaign has ended.
Examples of Revenue Adjustments
Basic Example
There is a country that shows up as N/A. It has zero viewable impressions and -$4.51 revenue.
Is this some sort of error? And if it isn't, why would the country show as N/A with negative revenue?
Reason for Adjustment:
Additional context: Many fields related to geographic data, device type, etc. may appear as "N/A" because an adjustment represents a total for a budget and cannot be broken down into subgroups like device or geographic region. No impressions, clicks, or other engagements are associated with an adjustment line item for similar reasons.
The negative revenue is a result of adjustments made to certain campaigns and it's shown as "N/A" because it is adjusted at the placement/ad level. The adjustment is part of the "closing of the month" process that the finance team uses to update revenue in accordance with budget impression totals verified by third-party vendors like MOAT.
📘Adjustment Process
It’s important to note that revenue adjustments are part of the “closing of the month” process to update revenue based on the totals confirmed by 3rd party vendors.
Complex Example
Why are there negative revenues being reported against Marketplace campaigns? The negative revenue is specific to an “Other” device type but could be attached to other dimensions. The negative amount is bringing down the total overall revenue.
Reason for Adjustment:
Additional context: One thing to take into consideration is that adjustments are posted for the month that the process has been completed. This is generally 1-2 months AFTER a campaign has ended, not in the month where impressions were served. For example, an adjustment made in June might be for a campaign that served during January - March. This is done so to not retroactively modify impression/revenue numbers.
Adjustments like this are usually made at the end of a marketplace campaign to account for over-delivery. These adjustments made to Publisher revenues can be seen on the Marketplace Campaigns tab, under "Other" when broken by device type. Breaking by device type will often show a negative value for "Other" since that "device type" contains the entire adjustment amount for mobile, tablet, and desktop impressions for the given inventory. The “Device type” labeled as “Other” will have negative revenues attached.
These values represent our standard reconciliation process that takes place for all Nativo Premium campaigns to remove non-viewable impressions. The only way to distribute this currently is by manual calculation, distributing revenue adjustment to a publication's placements based roughly on the impressions served to each.
🚧Device Type is important
A revenue adjustment is only made visible in a report when Device Type is chosen as a metric. Without that dimension, the adjustment is already accounted for in the final revenue listed.
How can we help?
There can be various reasons for why the revenue of your campaign was adjusted. As exampled above, specific situations can affect the adjustment and we are here to help you understand why and when it may have occurred. We are happy to help you along the way!
📘Questions?
If you have any questions, feel free to contact your Account Manager or email [email protected]