For all those hurdles, there are benefits to subscription-based pricing.
“I would like to see [the model] happen more,” said Sobel. “Companies that [drive] toward SaaS have a longer life as a software business, which is attractive to us as a partner.”
Sobel declined to say whether VivaKi supported this business model with any of its tech partners. However, he described what VivaKi would look for if it were to agree to a hard monthly commitment: “We’d be more inclined to do it with platforms with a certain amount of stability, a certain rigor, a certain level of service and support.”
Sobel means the platform achieves goal on a regular basis and, from a technological standpoint, it doesn’t go down and the user interface is consistently effective. Moreover, the platform must show “consistent and persistent results, so there are no major surprises in terms of what you’re doing from a campaign management perspective.”
Finally, he expects consistency in the services the vendor provides around the platform. (Bear in mind that Sobel previously noted the technology mostly hasn’t stabilized – and the platforms that he considers stable haven’t been so for long.)
Because of all these considerations, it’s usually larger brands – those that have committed a lot on programmatic and that have more internal resources – that are willing to engage in a subscription model for their buying platforms.
“In the last five years, you have seen General Mills, Kellogg’s, Unilever, P&G, Kimberly-Clark and many others have stood up that concept,” Suarez-Davis said.
Kellogg’s, where Suarez-Davis worked, set up a hub called a Center of Excellence (COE) that centralized the company’s media buying power, so brand managers didn’t have to dicker with managing subscription fees amid seasonal changes.
“[The COEs] steward the dollar with the agency on behalf of all the brands,” Suarez-Davis said. “That facilitates the use of things like SaaS models. You handle it there and allocate costs out accordingly. If you don’t have that, it’s difficult to have a SaaS model.”
He’s aware, of course, that not every marketer has the resources to centralize that media buying capability. And doing so is not the only way for marketers to achieve media transparency.
“There’s not a right way to do it,” he said. “[Each company] is going to determine if a SaaS platform is the most effective and efficient way.”
Horizon’s Heimlich agreed that SaaS isn’t the only option to gain media transparency.
“[Enterprises] can go to a transparent agency solution,” he said. Additionally, there are independent trading desks, consultants or auditing services that can sanity check an agency’s services. Companies can also itemize fees or build transparency into the contracts of their agencies or tech providers.
“[Clients] need a lot of help just knowing what to do,” Heimlich said. It’s another reason why SaaS shouldn’t be considered the definitive model for media transparency. “They need a lot of help just getting to what technology they need to license, and what their long-term strategy should be around technology.”
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