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Buy or-build
 

Buy or-build

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  • Ours is an age of ever-evolving innovation. Process improvements happen so often, and with such critical impact on the profitability of our business, that you might even liken it to being on a runaway train… one that, if it isn’t brought under control, will wipe out and take us all with it. Like Charlie Chaplin in Modern Times… we are trying to run businesses in a time of automation run amok
  • One of the consequences of all this automation? Constant absorption and integration of new processes requiring precious resources: Money – you need to buy or build software to support these new processes. Human – you need new, skilled workers to run them. And, perhaps most precious of all – time to integrate them into your businesses so that you can profit from their efficiencies.
  • One of the benefits of this crazy time? Now, for the first time ever, you can achieve the kind of scale that your best advertisers are looking for with controls that mean you can reap the rewards of that scale without jeopardizing your brand integrity. That’s the upside to the ad tech and audience management innovation that we’re all experiencing today.
  • And that’s one of the drivers behind the appearance on the market of literally hundreds of point solutions, each seeking appointments with you, each presenting themselves as essential to your business, each requiring thought, research, evaluation. Each requiring a some portion of your time. The result: confusion. Hesitation. Paralysis in some cases. Leading to a loss of momentum and an erosion of relationships with advertisers who are eager to experiment in order to reach the audience they desire.
  • There are DMPs to manage Audience Information. DSPs to bring buyers to the table. ATDs representing how media is bought today. And SSPs claiming to manage for yield, but is that enough. And that’s just now. What about next year? And in 24 months? Can anyone even begin to picture what our business will look like in five years?
  • What needed today and forevermore, by publishers of any scale, is a stack of products that will position them to compete in our brave new world… an inter-operative stack of technology that can manage volume and detail and allow them to offer and execute on the programs their best advertisers want. But it has to be a carefully assembled stack, because there are unforeseen costs involved.
  • Let’s say you get through all of the prep work and you build it and it’s a thing of beauty. Have you thought through what it will take to keep it current? All those point solutions we saw earlier – those on the Luma landscape? Their core business is technology. While you were creating your beautiful in-house solution, they were busy, too. Innovating. Creating new products and services that have carried the industry forward. Products and services that you need to, at the very least, work with to stay level. Do you have the dedicated resources to do that? Are you flexible and scalable? Have you anticipated properly?
  • So the temptation is to build it. Publishers look around at their employees and think: I have the resources right here, in house, to build what I need. Who knows better than we do what will work for us? And their IT executives think: I can do that. I can build it just for us. Who knows what we need better than we do? I’ll hire some techies and we’ll be in business.
  • The idea is just the beginning, though. There’s a long process of examination that has to precede the actual building of the tech to make sure that the final product meets all the needs. You have to write a Business Justification Document that proves that you need the tech and you’ve thought through what it will do and how it will work. You need a business plan accounting for how much it will cost – who you need to hire, how much they will cost, how you will house them. You need an MRD and a Product Requirements Document… and all of that needs to be done before a line of code is written. All of that taking months of work. And, if you’re a publishers of any size, all of that requiring some level of internal politics to keep the project on track.
  • Water cooler image or cafeteria line
  • And did you know that building it in-house makes you more vulnerable to data loss, and to viruses and worms? Possibly because viruses and worms are constantly adapting. The administrators of an isolated self-built system won’t have the expertise or experience to deal with one-off occurrences. Are you prepared to risk the disruptions to your primary revenue stream that these sorts of problems would most definitely entail?
  • Let’s say you get through all of the prep work and you build it and it’s a thing of beauty. Have you thought through what it will take to keep it current? All those point solutions we saw earlier – those on the Luma landscape? Their core business is technology. While you were creating your beautiful in-house solution, they were busy, too. Innovating. Creating new products and services that have carried the industry forward. Products and services that you need to, at the very least, work with to stay level. Do you have the dedicated resources to do that? Are you flexible and scalable? Have you anticipated properly?
  • Are you Google?
  • Because, after all, the successful vendor will remain that only by continuous innovation and improvement in product and service. The right vendor will practice customer-focused innovation – think of you and anticipate your needs as they plan product development and map the future. The right vendor will customize to your specifications.

Buy or-build Buy or-build Presentation Transcript

  • The Publishers’Innovation DilemmaSolving Innovation withTechnology:Buy or Build?Richard SobelDirector, Platform StrategyIAB Innovation DaysMay 17, 2012
  • Automation
  • Integration
  • Scale
  • Solutions Looking for Problems
  • Complexity creates long-term business problems… “ … And increases Total Cost of Ownership (TCO). IT infrastructures that are made up of many, varied components — many servers, multiple operating “ environments and complex data storage schemas— are harder to change, cost more to maintain and are less responsive to the needs of the enterprise. Janice Lawrence Semantic Arts, March 16, 20127
  • Factors of Decision MakingGoals Keys to Defining Business ROI
  • BUILD
  • Focus On Your Requirements
  • The Idea Is Just the Beginning
  • Beware Internal Politics
  • The Build Is Just The Start of Your Costs ““ Seventy percent of software costs occur after implementation.To Build or to Buy IT Applications? Polly S. Traylor Infoworld
  • What Does This Do To Your Business?
  • Can You Compete?187MM Unique Users comScore March 2012 $5B Display Sales Revenue 2011 10K 12% Display Sales Market Share PWC Entertainment & Media Outlook WW Display Market CY11
  • Take advantage of experts who know theirbusiness because they have multiple customers
  • The Power of Specialization “ “ In fact, by the age of twenty, the elite performers… had each totaled ten thousand hours of practice. Malcolm Gladwell Outliers: The Story of Success19
  • Intelligence RequiresVolume
  • Inform DevelopmentRoadmap
  • “ The best bet… is to collect and present the data, “ with detailed options and consequences, to business stakeholders. Then, let them make the decision. Mark Lutchen Former global CIO Now head of IT Effectiveness Practice PricewaterhouseCoopers22
  • Automation
  • Integration
  • Scale
  • Questions?Richard Sobel@sobelsays@pubmaticwww.pubmatic.com