The Case for Outsourcing Your Ad Program

The ad tech landscape is vast and expanding every year. A quick search on Built In NYC shows that there are over 480 ad tech companies just in New York City alone. When researching ways to build a new ad program or optimize your existing one, you’re likely to come across the many products and solutions that these ad tech providers offer.

Your product team might say that an in-house solution would be better and that they can build it quickly and inexpensively. But what’s the right path? Build in-house or outsource? It’s a complex decision, but let’s look at a few reasons why you may want to consider outsourcing your ad program:

1. Industry expertise. Digital ads are complex and evolving. There’s an entire industry that exists to produce ad programs that scale, involving companies that focus on managing that complexity and navigating to growth. Your product team, on the other hand, is going to have to start googling when they begin. They’ll have to learn how to write the tech scopes as they also catch up on the latest news about regulations, successful tactics, and the competition. Many ad programs are dead on arrival. Most of these were in-house efforts that were built wrong, lost traction, lost interest, or lost key people.

2. Full program management support. An ad tech company can provide the technology and product as well as the support and services behind them. They can also consult on program design and roadmap. While your product team could build into your existing tech stack, your account services, sales, and support teams would need to learn an entirely new media landscape to sell and to serve an ad program.

3. Maximum advertiser return. The budget that advertisers will actually commit is directly proportional to how well your program returns meet their unstated expectations and stack up against your competitions’ offerings. Advertisers will also scrutinize how well they are supported with data, reporting, insights, and budget forecasts to help them plan. Are your account teams equipped to do this work? Are they motivated to? Do they have the internal toolsets to gather and visualize the data that large agencies and advertisers expect? An ad tech provider will be able to immediately offer the return on ad spend and resources that advertisers demand.

But What About the Costs?

In some cases, an ad tech company will ask for a percentage of the revenue generated from the program in addition to some license fees. Why would you give up a piece of the action? It’s your program and your media property, after all.

Revenue sharing has always been part and parcel of the digital ad world, and it happens in every single large ad program in existence today. Commissions are paid to agencies, to resellers, to channel partners, to audience data providers, and to ad tech companies if they are able to grow programs and pull market share from other competing budgets. It’s not unlike the sales commissions that you pay your salespeople – you’re paying for performance.

When you give a revenue share, you get in return a motivated partner who is working daily to grow your business for you. Without a revenue share, you might get a SaaS product or a platform that works technically, but without the critical things that materialize additional revenue. It’s possible for some providers to “check the SLA box” with items like high uptime and availability while not investing in the technical improvements and program growth that actually drive results. An ad tech partner whose primary source of revenue is program growth will be motivated to move quickly and prioritize your needs.

Putting some of your revenue into the program’s growth should be done judiciously, but is absolutely the right way to motivate people to pull budgets away from the online tech giants and toward your program. Even if those people are your salespeople, you’re going to have to pay commissions to them — so there’s no ‘free lunch’ alternative. If you want the best result, it pays to outsource to experts.

The best path forward is to find the best experts you can, and pay them what they require to make your program a success. Tell your product teams to be involved and to learn. Once the program reaches a sufficient scale, then you can start migrating towards an in-house build (if that still makes sense.) It’s lower risk and a better outcome.

Not sure if an ads program is right for your website or app? Or, do you need help convincing your team that it is? Download our free guide for tips on getting internal buy-in, testing an ad program, and measuring success.

Marketing , Marketplaces