if it ain’t broke, don’t build it
Should we build our own retail media ad tech or buy it?
Build or buy is one of the ancient questions for tech companies. Everyone, especially tech companies, can build everything. The question is – Should they?
When thinking about building in-house one should consider:
- Business needs: What specific problems am I trying to solve with the in-house tech? What are the key requirements? Will taking the tech in-house help us achieve our goals?
- Resources: Do we have the in-house expertise and resources to build the tech and keep maintaining it? Do we understand what it takes? Do we know what it requires? Are we able to continue developing it to meet the market standards and requirements? Do we have the budget for it?
- Risk tolerance: How much risk are we willing to take? What is the risk? What is the worse case scenario if our in-house doesn’t work as expected?
There are pros and cons to each decision.
Building in-house enables you to perfectly tailor the tech to your specific needs, have more control over the development process and the end product and own the intellectual property. However it can also be expensive and time-consuming, you might find yourself in a trouble or behind the market if you don’t have the in-house expertise and resources to build and maintain the tech and it’s very risky, as you are fully responsible for the success of the project.
Buying or licensing will likely be cheaper and faster than building it yourself, enables you to tap into the expertise of the software vendor (who keeps developing the tech and making sure it meets the industry standards etc) and holds less risk, as the vendor is responsible for the success of the product. On the other hand it might not be fully customized to your specific needs, you might have less control over the product and its roadmap and you have to count on your vendor.
Let’s talk about ad tech
When talking about ad servers there is another aspect – Are you building something for the next 1-2 years or thinking about the long term? What will the market look like in 2 years? Where will the ad budget come from? What will the advertisers want? How will they manage their campaigns?
In the last decade, many online publishers built their in-house tech for serving ads.
In 2014, BuzzFeed built its own ad server called “BuzzFeed AdOps.” However, in 2017, the company switched to Google Ad Manager saying that the switch was made to improve efficiency and scalability.
In 2012, Condé Nast built its own ad server called “Condé Nast AdOps.” However, in 2019, the company switched to Google Ad Manager saying that the switch was made to take advantage of Google’s global reach and ad tech expertise.
In 2011, The New York Times built its own ad server called “NYT Advertising Platform.” However, in 2018, the company switched to Google Ad Manager saying that the switch was made to improve its ability to sell and deliver ads across all platforms.
Same thing happened with many other online publishers such as The Washington Post, Hearst Media, NBC, Viacom CBS, BBC, The Guardian, The Telegraph and others.
The reason they all killed their in-house tech was that it was no longer needed.
There were better solutions that could not only offer better tech, that was built by ad tech experts, who were constantly developing new features and improvements to help publishers succeed and offer advertisers best in class solutions, but also because it gave them access to more demand from a global network of advertisers.
The market had changed and so did the way advertisers and agencies bought media.
In-house tech and Adops were expensive, it was always behind and advertisers didn’t like it.
Let’s talk about retail media ad tech
2.5 years ago, we hosted a panel discussion about retail media in Germany and asked why Europe is lagging behind the US and what advice the pannelists can give European retailers to close the gap.
This is what Tim Nedden, Founder & Managing Director at Finc3 Commerce (one of the first and leading European ecommerce media agencies now known as Front Row Germany) said: “Advertisers are more open to try out more platform and adopt new channels. Keep the entry barrier as low as possible. Enable quick and easy start. Offer a tool with the market standards – don’t try to reinvent the wheel. This will be harder to the advertisers to understand. 3rd party software like Mabaya that can be easily integrated and offer good market standard make it easier for the advertiser to adopt”.
He added that “The reason that it (sponsored product) didn’t take off is that retailers tried building their own platforms and there were no standards. Stick to standard – don’t reinvent the wheel – take a platform that is already known in the market.”.
2.5 years later, at DMEXCO – Digital Marketing Expo & Conference, Daniel Knapp, Chief Economist at IAB Europe, said that Europe is still very much lagging behind.
Then he said why, and the main 2 reasons he mentioned were lack of standardization and connectivity.
What happened to search and display will happen also to retail media.
Eventually agencies and advertisers would prefer to work with a few platforms and networks instead of managing campaigns in different walled garden that offer different tools.
The ad platforms that retailers use should be (a) aligned with market standards and (b) connected to demand coming from different sources, networks and platforms.
If you have an ecommerce website and you want to get into the retail media business don’t try to build it. There is no need.
If you are already using a good platform then remember the old saying – If it ain’t broke, don’t fix it, especially if there is a good chance that in a few years the platform that you built would not serve your needs anyway. Ask BuzzFeed.
About Mabaya
Mabaya, a Criteo company, offers a white-label self-service retail media platform for online retailers and marketplaces that enables sellers and brands to bid in order to ensure their products are listed in premium locations in the online store.
The platform is integrated in more than 50 ecommerce sites around the globe (such as Bol.com, Jumia, Manomano, Kaufland, Falabella etc.), serving more than 100,000 advertisers and sellers.
