“The Sell Sider” is a column written by the sell side of the digital media community.
Today’s column is written by Jayson Dubin, CEO at Playwire.
Remember ad exchanges? They used to be a regular feature of the ad tech landscape. Now? You can hardly find a stand-alone ad exchange. That’s because other ad tech players, including supply-side platforms (SSPs), and ad servers bought all of the ad exchanges and rolled them into their suite of services.
Consolidation is happening at record-breaking speed in ad tech. That leaves the industry with a problem. At best, this consolidation is confusing for publishers. At worst, it’s causing them to partner with tools and companies that simply can’t deliver on the promises they are making.
As consolidation continues, it’s likely the big companies are going to keep getting bigger, and the small companies are going to keep getting smaller.
There’s a simple reason for that: momentum. Once an ad tech company acquires or merges with another, it has that much more weight to throw around for the next merger or acquisition. Meanwhile, the smaller companies lose revenue to the larger companies until they are acquired or simply close up shop.
It’s a system in which the best company doesn’t always win. And when you’re trying to compete in web or app publishing, you need to work with the best – not the biggest.
But there’s a reason this pattern occurs. Ad tech has a relatively low barrier to entry. Partners can break into the market by building header-bidding stacks with limited capabilities. These partners may not have a particularly effective product, but their egos bolster them enough to convince them they are going to make a lot of money in this space.
The result? They get by on false promises. They shroud what they really can do for publishers and, in time, they fail to deliver, leaving the publisher to bear the consequences.
Sorting fact from fiction
Publishers can protect themselves in the midst of disruption by taking a few easy steps:
1. Investigate claims
Lots of ad tech companies make big claims about their capabilities. Investigate them. If a potential partner says they have a direct sales team, don’t just take their word for it. Instead, head over to LinkedIn and look at their employees. How many salespeople do they have? Is it just one?
If the company says they can do something their competitors can’t do in header bidding, why not cross-check that with their competitors? Get on a call and tell them what your potential partner said they could do, and see what they say.
2. Go for simplicity
If a partner can’t explain their offering to you in a way that you understand, they may not be giving you the whole truth. While ad tech is complicated, the core concepts that drive existing capabilities and innovations are simple. A true expert can explain them in a way a nonexpert could digest.
But keep this in mind: If it sounds too good to be true, it probably is. For example, if a partner says they take a much lower revenue share percentage than their competitors, don’t just calculate what that would look like based on your current numbers; consider the other numbers that go with that lower revenue share figure, such as total revenue for publisher partners.
3. Check for reputable partners and relevant certifications
Does the partner you are considering have or provide access to a data management platform (DMP) that will enable you to sell your data? Without a DMP, you’re missing out on an important way to increase your CPMs.
Are they certified with the Trustworthy Accountability Group (TAG)? Without TAG certification, major brands won’t work with you or your inventory.
If you’re a children’s publisher, is the partner certified with KidSAFE, the Children’s Advertising Review Unit (CARU) and the COPPA Safe Harbor Program? Without these credentials, your entire brand is in danger – not just your revenue.
The list goes on, but the point remains: No matter how big the ad tech company is, it still has to work with the right tools and get the right certifications to be of use to you.
The ad tech landscape is ever evolving, but your approach to choosing the right partner should remain consistent. Do your research and think critically.