Operative Blog

At the back of every publisher’s mind is a question: “Does my revenue reflect the true value of my inventory?” In far too many cases the answer is either “no” or “I wish I knew!” So how can publishers feel confident that they’re selling the right inventory to the right buyer at the right price? The answer: productization. To learn more, Amy Inlow, our blog editor, asked product manager Andrew Sullivan to explain what productization is all about.

AI: Let’s start with the basics. What is productization, and why is it important for publishers?

AS: Simply put, productization is deciding exactly what you plan to sell and being consistent about it. Consistency is helpful for your sales teams, your buyers, your inventory managers, your pricing team and your traffickers. If everyone is working with a commonly accepted product catalog with predictable pricing rules then it takes the guesswork out of everyday tasks.

In the end a good productization practice will result in a toolset that the entire organization refers to constantly. It should be a searchable catalog that the sales team uses to build proposals for buyers, the foundation for a comprehensive rate card, an implementation guide for campaign managers and a reference for analytics teams.

The goal is to strike a balance that gives buyers access to the audience they’re looking for on safe, well-defined content, while maintaining a level of structure and control for operations teams to traffic and manage campaigns. But most important, I think, productization lets publishers confidently break out of the constraints imposed on them by their ad servers so they can create products and packages that really reflect buyer demand.

AI: How does productization actually occur?

AS: There are a few fundamental aspects to the process. The first is simply segmenting all of the ad slots a publisher has access to so that they can actually be sold. In practice this means starting with ad server tags to make sure they’re following a consistent structure, and documenting clearly how to target any given site, channel, section, page, etc.

On top of that the publisher should take stock of all demo, geo, behavioral and other targeting that is feasible based on their technology stack, and make decisions about which they’re ready to expose to buyers. Are you unable to DMA target in some areas because your mobile ad server doesn’t support it? Does it really pay to allow age targeting on the home page, or is it better to limit that inventory to exclusive sponsorships? Determine the combinations of targeting that make sense for your business on each of your properties, and document those as well.

With those things in place, ongoing productization means maintaining an internally published list of buyer friendly products with documented controls around pricing, targeting, creative specs, buyer limitations – and then as much META information as possible to help sell the inventory.

AI: What are some of the business issues productization helps publishers address?

AS: A big issue is simply knowing all of the ad slots publishers have available to sell. After all, you can’t sell ad slots that you don’t know about. This may seem easy but it can be challenging when new tags are being generated every day, or if the inventory was acquired through partnerships with other publishers or networks, for example.

Another issue is delivering on customer expectations. Sales teams are often too quick to sell products that are driven by the unique requirements of the buyer. For instance, the buyer may ask for audience segmentation, frequency capping, or special creative that aren’t standard offerings. The operations team is left to figure out how to match what’s been sold with what can be delivered, and turn it around in a few weeks or days. This disconnect causes delays, discrepancies, and unhappy buyers. Productization can help eliminate that disconnect by clearly identifying what is available to a sales team. This doesn’t mean that your organization shouldn’t offer the new and bleeding-edge experience buyers want, but when a request comes in that doesn’t match up to existing products, clear product definitions should provide the time and context the publisher needs to really capitalize on the opportunity.

Inventory management also gets a boost from productization. Not only does the structure and consistency of the catalog make inventory management possible, it’s also a way to prevent campaigns with combinations of targets and ad slots that have no chance of delivering in full. Is it worth it to deal with the booking calculations for users of a certain age in a specific DMA on your travel section? If not, don’t sell it.

AI: How will a publisher benefit from productization?

AS: A huge benefit is the sustainable boost in revenue that comes from implementing enterprise-wide sales guidelines. There may be inventory that performs best when sold to particular industries, or through specific sales teams, or when offered through an exchange. Implementing controls that ensure inventory is sold with the whole yield curve in mind is the only way to raise the effective CPM across the board.

Rate card management tools also help publishers boost revenue because they set standard rates for all products by channel, including price goals and minimum floors. They also let publishers ensure that products are sold using the cost method (CPM, CPC, etc.) that delivers the best results.

Another benefit is improved reporting. Productization is instrumental for any critical revenue analytics. The holistic view lets publishers compare how their inventory performs across sales teams and channels. Since all sales teams, including performance and marketing teams, will be working with comparable products, publishers can actually compare apples to apples.

AI:  How does a publisher go about productizing inventory? What are the first steps?

AS: Any publisher doing direct sales today has been doing productization since their first IO was trafficked. Even if they haven’t been thinking about it as productization, all the placement lists, trafficking instructions, rate cards, creative specs and other materials that sit in Excel, Outlook, Powerpoint and people’s heads are the building blocks of a product catalog. The first step is to focus as an organization on the right strategy for the business and get buy-in from stakeholders to participate. From there it’s a matter of deciding on the technical infrastructure for managing the catalog and going through the process.

To really manage a robust enterprise level catalog requires an Advertising Business Management platform that can really bring everything together. It should provide the tools to generate and manage a product catalog, and ideally it will embed that catalog in the sales, trafficking and reconciliation process with hooks into business intelligence and inventory management.

Operative hosted a webinar on this topic Thursday, November 17.  Our guest speaker and presenter was Joanna Bloor, VP of Sales Operations for Pandora.  To obtain a copy of the webinar recording, please send an email to info@operative.com and we will email you the link once it becomes available.

About Andrew Sullivan

Andrew is the mastermind of Operative’s unique, multi-dimensional inventory management solution, as well as the company’s Ad Master Model and Campaign 360, solutions that enable publishers to better manage and optimize their product offerings and solutions set.  In his role as Product Manager, Andrew manages and oversees development for the software; acts as a liaison between sales, account management and development; and is continually designing solutions to meet ongoing publisher challenges.

Andrew began his career at Operative as a Campaign Manager, trafficking, managing and optimizing campaigns for both publisher and agency clients.  Within a year of joining the company, he was leading the systems integration team, working with some of Operative’s largest clients on software implementations.  Andrew also served as Senior Manager for Strategic Development, where he focused on new product innovation. 

Prior to joining Operative, Andrew worked as an Art Director at Agora Studios.  He holds a Bachelor of Science in Electronic Media, Arts and Communication from Rensselaer Polytechnic Institute.  

For many publishers, extending the CRM system to incorporate the order management functions of digital ad sales seems like a good strategy (or at least an easier one than implementing a whole new system for booking campaigns). But as many publishers have learned, it’s an approach that’s filled with formidable obstacles – inability to scale, redundant data entry, and serious investments in software development – to name just a few.  To find out why CRM systems aren’t quite up to the task of managing the digital ad business, our blog editor, Amy Inlow, sat down with Geoff Petkus, Senior Director of Product Management, and asked him to share what he’s seen first-hand.

AI: Are publishers asking their CRM systems to do too much? Why?

GP: Yes. Over a 4 or 5-year period we’ve seen publishers attempt to extend their CRM system to handle their order management functions. But it’s way more than their CRM systems can handle. The digital advertising system is unique, and CRM systems are – by design – generic, since they need to support as many industries as possible.

There are many reasons why publishers have gone down this path. Most publishers with roots in traditional media already had a CRM system in place. Since digital ad sales initially only represented a small fraction of the company’s total revenue a dedicated digital order management system just didn’t seem necessary or justifiable. In addition, emerging Internet publishers often implement a CRM solution first because that is where the growing pains are first felt, plus the CRM vendors have done a good job of pitching a low barrier to entry and ultimate flexibility and customization.

AI: What are publishers discovering once they go down this path?

GP: A bunch of pain points, actually, starting with a lot of data-entry redundancy and manual errors.  Here’s why: at the very highest level, publishers have product, sales, trafficking and billing processes, which means a lot data entry is necessary to move a campaign from one process to another. A typical, multi-channel order can require as many as 10-20 data-entry redundancies moving a campaign through the CRM, ad servers, affiliate partner systems, financial systems and so on. You can see how there is a lot of room for error.

CRM companies have successfully created the perception their systems can accommodate any business requirements you have. But that’s a slippery slope. CRM systems don’t have the fields that are standard in our industry – CPM, CPC, CPD rates, targeting premiums, number of impressions – really basic stuff.  All of that requires custom configuration.

And there’s a host of other issues that will need custom-developed fixes.  Sales can’t respond to RFPs quickly if they don’t have real-time access to available inventory, so the publisher needs a custom integration with its inventory management process. And ad servers are completely different systems, which means ad ops personnel end up entering campaigns manually. And CRM systems haven’t been designed to handle the forecasting requirements that are so vital in our world.

So what publishers are finding, in a nutshell, is that the CRM-extension path necessarily entails a lot of time focusing on software development and managing its lifecycle to make-up for the CRM shortcomings.

AI: But that’s not to say CRM systems aren’t vital to publishers …

GP: Absolutely! CRM systems were designed to help companies manage the interactions with customers and prospects, and they do a very good job at those kinds of tasks. They make it easier for media companies to manage marketing and lead-generation programs, track account activity, view the revenue pipeline, and support ticket management. I see a lot of cases where publishers are spending so much time trying to get their CRM systems to do things it wasn’t meant to do, like order management, which they neglect to fully utilize the core competencies.

AI: So what do you recommend for publishers that are ramping up to enterprise-level digital ad sales?

GP: Publishers need to remember that CRM specializes in relationship management. In order to scale publishers will need to implement a more comprehensive solution that can bring their whole digital advertising value chain together. Advertising Business Management (ABM) platforms are a great solution for integrating all of their silos. These platforms provide the underlying business layer that brings together all of the people, processes and technologies required to package, sell, traffic, manage, optimize and bill ads.

AI: And the CRM plugs into that …

GP: That’s right, the CRM system plugs into the ABM platform. What’s more, all of the people throughout the organization who need access to the data that’s stored in the CRM can access it through the ABM. So for instance, finance can get deal terms to generate invoices.  In that way, the ABM actually enhances the benefits of the CRM system by making its data more available.

AI: What are some of the operational efficiencies that result from ABMs?

GP: Publishers can streamline their catalog management and media-plan building processes. In order to sell, sales teams need a catalog of sellable products, and they need a process to sell those products quickly. But with a CRM system filling in for order management, there’s a huge amount of manual effort involved. ABM systems, on the other hand, are specifically designed to handle digital media products, so a lot of that manual intervention can be eliminated right off the bat. Sales won’t need to wade through spreadsheets attempting to find ad products that match their customers’ requirements. The ABM system also integrates with the front-end systems that agencies use, which makes it easier for sales to respond to RFPs with well-built media plans.

Ad Ops execution is another area where publishers will see huge gains in efficiency. CRM systems don’t integrate with ad servers, and that introduces a wrench for ad op teams. Without an integration a spider web of manual processes evolve between the CRM and ad servers, resulting in duplicate data entry, trafficking errors, delays in campaign launch and more. But an ABM platform provides the proper infrastructure to integrate CRM with ad servers, which means all that critical data can flow smoothly and automatically.

Another system critical to the publisher: Billing. CRM systems weren’t designed for the unique ways that campaigns are sold and launched. Nor can they connect to the financial systems that the billing department uses to generate invoices. So again, a lot of manual intervention is required, which means potential errors, and slower cash flows. An ABM platform, on the other hand, spans and compiles all of the information finance needs to generate invoices.

AI: To sum up, what are some of the benefits publishers can expect to realize by integrating their CRM system with an ABM platform?

GP: In addition to the significant operational efficiencies we just mentioned, they will benefit from reduced data entry and errors, better business transparency, and lower operating costs.

Note: Operative is hosting an EXCLUSIVE webinar on this topic Thursday, October 20th at 10:00 a.m. EST, featuring guest speaker Michael Goefron, Senior Director of Ad Operations for Alloy Digital.  To register for this event, please visit www.operative.com/crmmeetabm.

  About Geoff Petkus, Senior Director of Product Management, Operative