(Originally published in ClickZ, December 2001) by Eric Picard
The online advertising industry requires technology to exist. More than any other ad medium, we’re technology-driven.
Recently, my colleague Tig Tillinghast wrote a mind-expanding article about the inefficiencies of the Web as an advertising medium. In it he states: “Newspaper can print a whole 32-page tabloid with 250 ads in it for $0.20 each, but it costs a Web site 25 percent more to serve the same number of ads.”
This may be true, but let’s analyze why it costs more. We’ve been printing (and advertising in) newspapers for literally hundreds of years. That’s plenty of time to figure out what the economies of scale are and to enable printing 250 ads for $0.20 each. The technology is relatively simple. Any changes over the past 50 years have only made it cheaper to produce a higher quality product.
You can’t compare the delivery of 250 online ads with that of 250 print ads, any more than you can compare print with TV ads. It’s apples to rhubarb.
The real world of online advertising requires certain technologies. Therefore, you need to forge relationships with your technology providers.
There’s a difference between viewing a technology provider as a vendor (weak relationship) or a partner (strong relationship). Dictionary.com defines “vendor” as: “One that sells or vends: a street vendor; a vendor of software products on the Web.” “Partner” is defined as: “One that is united or associated with another or others in an activity or a sphere of common interest.”
This should apply to your approach to tech providers. You can relate to them as a utility, like the electric or gas company. You can view them as a mission-critical service provider, like the phone company. Neither model suffices. You both have the same interests. They succeed if you succeed. Grow your business, you’ll have more need for their services.
Even services such as ad serving, often referred to lately as a commodity, are not mature enough to treat dismissively. There are not enough providers to choose from (and fewer after this year). There’s too much volatility, too much change, and too many issues for you to make that mistake.
Here are some basics about partnering with technology providers:
- Yes, the economy sucks. No, you can’t beat up your tech partner on pricing to the point that it can’t turn a profit. It’ll go out of business, and that doesn’t help anyone.
- Find ways to pay your technology partner more by having it help grow your business. Tie your businesses together to gain the most from your partnership. Don’t slip into a valueless “paper partnership.” Apply resources and watch the relationship flourish.
- No company has every feature or widget you need. Product development (or customization) is required before you’ll be happy. A technology company will meet the needs of partners before worrying about customers who treat it like a vendor.
- Partners often participate on advisory councils and are involved in product research and development. This leads to measurable benefits, such as accessing new features before anyone else. You’re not likely to get that level of service from a mere vendor.
- Choose technology providers with upside potential and whose values match your company’s. Ask hard questions about service expectations, commitments to quality, and what the plan is when problems do arise (they always do).
Work from a common set of realistic expectations. There’s been so much over-promising and underdelivering in our industry that most customers are wary of committing to deeper relationships.
If a tech provider makes claims that set off your “spidey sense,” have it explain exactly how it’s going to live up to the claims. If high expectations are set by sales or marketing, ask to speak with a senior product or engineering rep to ensure the entire company is in alignment.
Make sure the company knows you want to partner with it. Be clear about expectations you have from a partnership as opposed to weaker relationships it might have with other customers. Make the opportunity attractive. Sell the company on your value as a partner. Expect and demand more. Be willing to cooperate. You’ll both come out ahead.
I hope your holidays were wonderful, and you and your family are approaching the new year with great expectations. –Eric
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