Ad management platform for publishers: build in-house vs. buy pubtech solutions

Ad Management Platform for Publishers: The Build vs. Buy Dilemma

In a marketing class, a teacher shared a story about hot-dog trucks outside the university. There were many, but one always had a long line. The teacher, curious as a marketing expert, asked the popular truck owner, "Why do people love your hot dogs the most?" The owner confidently replied, "It's the hand-made tomato sauce; everyone loves it."

Then, the teacher posed a thought-provoking question to the class: "What's his core business?" He explained. "You might think it's selling hot dogs… But, what if he decides to sell his amazing tomato sauce at scale to all the other trucks?”. This led to a critical lesson: understanding what is your core business and focusing on it is essential to maximize your business success. The hot-dog vendor's success wasn't in selling hot-dogs, but in his unique tomato sauce that made his business unique. What is your business special sauce?

This lesson parallels the experiences of publishers like Assertive Yield’s CEO and founder, Nils Lind, who was a publisher who faced the complex challenge of analyzing, optimizing, and managing ad revenue data from various channels. 

After suffering significant revenue losses, closing 2 of the 10 online communities he owned, he decided to use his engineering and ad tech knowledge to focus on the development of his in-house ad management platform back in 2017. A few years later, his advanced script on the page could collect and normalize data, and attribute revenue to a session level, enabling detailed and cross-analysis among multiple dimensions and metrics. This empowered him to effectively troubleshoot, balance user experience, and optimize ad revenue as never before. 

Recognizing its assertive impact, Nils shifted focus to what truly constituted his core business. Some years after, Assertive Yield was established to empower other publishers to enhance their user experience and lifetime value while maximizing their ad revenue.

This story sets the stage for a deeper exploration of the critical choice between building in-house or buying solutions in the realm of ad monetization for publishers. 

According to the Chief Executive Officer at Hitopic, Pierre Bouchard, "Starting, we built our own ad solutions, and they worked well for us. But as time went on, we needed to add more features for better management. Creating these features ourselves was fine at first, but it became a challenge to maintain and keep things bug-free. We wanted a secure and efficient way to grow without any performance issues. That's when the big question hit us: do we keep building or do we buy a solution? After testing different options, we finally found one that is the most relevant and powerful tool for our needs in the ad market."

Hitopic stands as the sole Google Certified Publishing Partner in France, distinguishing itself as a premier French company specializing in audience monetization consulting for publishers and advertisers. Offering programmatic solutions, expertise, and tools, Hitopic caters to both sellers and buyers in the advertising industry, ensuring unparalleled support and services in the French market.

Let's dive into the advantages and downturns surrounding this common dilemma among publishers: should we build or maintain an in-house solution or buy a total ad revenue management software?

In-House Ad Management Solutions: Pros and Cons for Publishers

It's no surprise that creating in-house tech solutions for your website's ad monetization operations demands a significant investment and focus. However, it's often during the process of hiring a developer team or afterward, with the maintenance costs that lead many publishers to abandon projects either prematurely or when they're barely functional. 

Typically, when you consult AdOps, BI, engineering, or tech teams, you'll find a preference for developing solutions in-house. This inclination to build rather than buy software is no surprise. As a tech builder, the challenge of developing solutions from scratch (and better than vendors) is inherent. There's a unique thrill in starting from ground zero. 

If you have experience in developing software in-house, you're likely familiar with the advantages and downturns that come with creating every product feature internally. 

However, considering the advances in big data, machine learning, and artificial intelligence, it is becoming less reasonable not to take advantage of big data and broader market intelligence. But we can talk about that later on.

Advantages of In-House Ad Management Platform for Publishers

1. Customization: Building your solution allows for greater customization to meet the specific needs of your publishing business, teams, and ad stack. Tailoring analysis, reports, and dashboards.
2. Dependency Reduction: Reduced dependency on third-party solutions can enhance control, and for top-tier publishers, possibly data security. It also allows you to tailor the system to your specific needs, according to your country's legislation, and specific business rules.
3. Knowledge Base: Building your in-house solution can improve internal expertise if you have the resources to invest, attract and train ad tech talents, and keep them motivated. The team can develop a deep understanding of the business ecosystem, metrics, data pipelines, new versions, and industry-specific updates.
4. Pivoting Opportunity: Creating an in-house wrapper, analytics, and ad revenue management platform can lead to a new business if that’s part of the corporate strategy. In the past, developing your programmatic analytics or header bidding wrapper system used to bring substantial benefits, especially for larger publishers that had no other suitable solution in the market. 

Today, even with the resources and commitment to see the project through, that decision has to be analyzed from a long-term perspective. It's crucial to carefully assess the investment costs, risks, and drawbacks, and weigh them against your specific business goals and needs before proceeding with such a side project business. Now, let’s explore the downsides for publishers to develop ad tech solutions internally.

Downsides for Publishers of Building In-House Ad Management Platform

1. Competitive Advantage: An in-house system used to give publishers a competitive edge if it offers unique features or insights that are not readily available in the market. Some game-changing publisher-built solutions might give you more features and more insights.
2. Artificial Intelligence: Nowadays, with solutions empowered by artificial intelligence, you might lose valuable industry insights, out of machine learning from billions of data points, and impressions of thousands of publishers around the globe. Consider how easily an in-house solution can keep up with tech innovations, and new feature releases, and keep you competitive.
3. Industry Benchmark: Sharing trends and insights can be valuable for publishers. However, if you're developing an in-house solution, you might need to find ways to anonymize and aggregate data for benchmarking without compromising privacy and sensitive information.
4. Time: Developing an analytics or HB wrapper platform that combines prebid, programmatic, Amazon, direct sales, content recommendation, and AdSense takes years, which means delays in realizing the benefits. It's crucial to have a clear project timeline and milestones to ensure progress in the long term.
5. Dedicated Team: Building and maintaining such a system necessitates a skilled and dedicated team. This could be a challenge if you're short on resources or need to divert existing teams to this project. Other challenges include bandwidth limitations faced by most publishers and resource constraints that hinder the ability to manage continuous updates effectively.
6. Dependency on In-House Developers: When it comes to in-house, reliance on in-house developers for optimization can be a bottleneck. Development speed may be hindered by the internal team's capacity or responsiveness.
7. Maintenance & Updates: An in-house system requires ongoing maintenance, updates, and specialized ad tech business support. You need to ensure that your team can handle this effectively. Maintaining prebid wrapper code updated is labor-intensive since Prebid frequently undergoes changes, demanding ongoing effort. Many publishers lack the necessary development resources for consistent updates while keeping their core product running.
8. Error Detection Challenges: In in-house-built total ad management solutions, the identification of errors is slower and limited. A third-party solution can identify errors, vendors’ shutdowns, and API issues at scale faster.
9. Innovation Lag in Features Optimization: Relying solely on an in-house team may result in a lag in adopting the latest revenue optimization innovations. The pace of development may not always align with rapidly changing industry trends, potentially hindering revenue growth.
10. Risk of Knowledge Loss: There are also instances where publishers built their in-house solutions, and the project owner or a key developer leaves the company. Besides, layoffs or transitions can result in uncertainties about the functionality or changes made if the solution lacks change control or version history features.
11. Data Privacy Risk: Established solutions are more likely to have undergone rigorous testing and compliance checks in comparison with in-house solutions. If you’re developing your solution, make sure to deeply understand the privacy requirements according to each country's legislation.
12. Cost and Optimization Trade-off: As mentioned above, building an in-house solution can be an expensive undertaking, requiring substantial financial resources to maintain a team of specialized developers, particularly those skilled in Prebid wrapper and monetization. 

The cost can be substantial, including salaries for dedicated teams, infrastructure costs, and ongoing maintenance expenses. It's essential to have a robust budget and ROI analysis. The absence of external costs needs to be weighed against the lack of optimization assistance, and robust machine learning with broader market intelligence.

As we discussed, keeping up with the ever-evolving industry standards and ensuring compatibility can be a persistent challenge when maintaining an in-house solution. If you found yourself and internal teams with boundless time, an endless budget, and unlimited resources to create every desired solution feature for your monetization, you probably wouldn't be perusing this article.

"In the fast-paced world of ad tech, every second counts. Our growth needs a meticulous plan. AY isn't just a tool for us; it's the backbone of our success story. With an infrastructure built for efficiency, AY ensures our ads are delivered swiftly and reliably. We're not just buying a solution; we're investing in speed, reliability, ad tech know-how, and the foundation to take Hitopic to new heights globally, supported by a team of experts who understand the ins and outs of the ad industry." Pierre Bouchard, CEO at Hitopic.

Hence, an increasing number of programmatic leaders are exploring the option of partnering with third-party software and seamlessly incorporating it into their current ad stack. Let’s explore the pros and cons of third-party software for publishers aiming to achieve maximal revenue, reduce costs, and enhance user experience.

Advantages of Buying an Ad Management Solutions for Publishers

Although we want to be agnostic here, we can only deep dive into the advantages we access by analyzing Assertive Yield Solutions. However, we believe that a few of them can be used to balance your decision when deciding to partner with a company like us:

1. Easy implementation: A few solutions have almost an instant setup. Publishers can seamlessly implement a script code on their page and start analyzing their revenue across multiple revenue streams within 5 minutes of setup completion. 
2. All-in-One solution: You might find that you can replace multiple vendors with a single solution that combines more than eleven solutions, such as header bidding wrapper, web analytics, ad refresh, dynamic ad injection, lazy loading, dynamic flooring, IVT reporting, content analytics, smart layouts, reporting and more. Besides reducing ad tech cost, you will surely win operational efficiency.

"When it comes to scalability, we want a tool that can work easily for one publisher or a thousand. We need it to be reliable, fast (we're talking milliseconds for delivering ads), and packed with the best ad industry features. AY became our top choice because it offers a solid infrastructure to deliver ads quickly. Our main focus is on making sure publishers' revenue isn't impacted by any issues. We're not just buying a tool; we're investing in expertise and deep knowledge of ad tech to help us grow and scale our activities worldwide." - Pierre Bouchard, Hitopic.

3. Constant Customization and Updates: Some platforms allow you to create unlimited custom variants, features, alerts, and dashboards. Or even to export data already normalized to your BI platform. AY suite has a native Prebid integration and our active participation in prebid.org keeps the team informed about any changes.
4. Access to Machine Learning: Unlike most in-house solutions, a purchased solution offers the advantage of cutting-edge machine learning capabilities, such as revenue prediction capability. AY Yield Intelligence tool, for example, provides real-time revenue predictions with 94-98% accuracy, with a 30-second reporting latency (a minimum of 7 days' data for the prediction model is required). 
5. Dedicated Support Team: Usually, robust ad platforms for publishers come with a dedicated support team, providing continuous global assistance. 
6. Slice & Dice Data Platform: The purchased solution empowers publishers to make changes independently, ensuring flexibility. The platform facilitates updates to pre-bid, optimizations, and overall improvements in response to client feedback.
7. Wrapper Optimization: AY, for example, offers a wrapper that enables A/B/n to test everything in real-time to optimize your ad stack, layouts, and ad delivery configurations, increasing the publisher's revenue by at least 15-20%.
8. Constant Innovation in Optimization: A team of dedicated engineers consistently works on enhancing the platform based on client needs and evolving use cases. Regular iterations and improvements ensure the next version of the Yield Manager aligns with client requirements.
9. Avoiding Development Challenges: Companies building their solutions may face challenges like unexpected layoffs of key engineers, leading to knowledge gaps. Adopting a purchased solution mitigates the risk of losing critical expertise and experiencing unforeseen errors. 
10. Cost-efficiency: While building internally allows complete control, purchasing a solution eliminates the need for continuous development costs. The cost perspective favors buying, for all the reasons mentioned above. Especially when you can find an all-in-one solution that can reduce your ad tech cost while increasing operational efficiency and uplifting your revenue potential.

"Choosing to buy a solution brings a cascade of advantages: reduced in-house development costs, a continuous stream of updates and optimizations, and a team of dedicated experts. Furthermore, the potential for developing additional functionalities, such as dynamic flooring and layouts, adds a whole new layer of optimization," emphasized Sherzod Risaev, COO at Assertive Yield.

Cons of Third-Party Solutions for Publishers

Using a third-party solution for publisher monetization operations, such as ad revenue management software, can offer convenience and expertise, but it also comes with several potential drawbacks, especially if the vendor has not offered you a chance to test the solution before committing to a long-term contract.

1. Dependence on Vendor: Relying on a third-party solution can lead to dependence on the vendor for updates, support, and maintenance. Make sure to investigate their reputation, how long their solution is running, their accuracy, and their speed of innovation.
2. Vendor Pivoting: It’s also important to analyze if the ad tech provider has more than one focus, for example, is their primary customer the publisher or advertiser, and their primary product the publisher tech or SSP? Both in terms of their internal resource allocation (support, bug fixing and innovation) as well as being transparent and unbiased (not prioritizing their own demand).
3. Limited Customization: Depending on the vendor, customization options may be limited, making it challenging to tailor the solution to specific business needs or unique operational requirements. Investigate how your new partner is customer-centric on developing new products or features.
4. Integration Challenges: Integrating third-party solutions with existing systems and processes can occasionally be complex and costly. Compatibility issues may arise, resulting in additional time and resources for resolution. Seamless integration is crucial, with the understanding that your team plays a significant role in ensuring its success too. Make sure to define a project team responsible for the integration.
5. Security and Privacy Concerns: Using an external solution can pose risks to data security and privacy, especially if sensitive company or customer information is handled by third-party software. Ensure that the third-party vendors are compliant with GDPR, and your country's legislations.
6. Potential for Service Disruptions: Any downtime or service issues on the vendor's end can directly impact your business operations. Assess the reliability of your potential partner's servers to ensure the performance you require.

Balancing these cons with the potential benefits might help you to decide whether to build an in-house solution or opt for a third-party ad revenue management solution built for publishers.

However, with AY's Yield Manager, - a comprehensive, specialized solution that addresses many of the challenges publishers face in ad monetization, publishers don't need to face the dilemma of choosing to build or buy an ad management system anymore, they now have a better option to buy AND build. The AY's Yield Manager suite of solutions gives pubs the flexibility to customize everything to their needs by seamlessly integrating new partners, creating custom variants, segments, configurable dashboards, and more than 300 metrics and dimensions to build their own reports!

If you're looking to enhance your ad revenue strategy with a solution that's tailored to your needs, Assertive Yield is here to help. Our platform is designed to provide the best of both worlds: the efficiency and expertise of third-party software, combined with the customization and control akin to an in-house solution. Explore more.

Request a demo today or try our publisher suite for free to maximize your ad revenue potential. Let Assertive Yield be the key to unlocking your full revenue potential.