Working with publishers has taught Relevant Digital much about the ins and outs of developing technology in-house versus utilising solutions developed by external parties. We've learned how much effort and resources are required to create and maintain quality technological functionalities. Both developing in-house and using external solutions have advantages, but choosing between them is not always straightforward.
In this text, we highlight some perspectives that can help you make decisions between internal development and purchasing technologies
The Role of Stakeholders in Choosing Technology Solutions
Starting with stakeholders, our work with publishers has identified three key groups in selecting technology solutions: operational users (ad sales and ad operations), decision-makers, and developers.
Operational users often need solutions for their immediate needs and prefer quick deployment products. Decision-makers evaluate proposals from a business and financial perspective, seeking a balance between users' needs and organisational goals. On the other hand, developers handle internal development, focusing on compatibility and innovation.
From our perspective, the procurement process typically begins with discussions with a decision-maker or operational stakeholder. We assess the product's need and suitability to solve the publisher's challenges through meetings and product demonstrations.
A practical example is our Relevant Yield platform, including its HB Manager & HB Analytics modules. Relevant Yield analyses and converts a large amount of data from various sources into usable information, supporting ad revenue reporting and optimisation. It also enables easy implementation and management of Header Bidding without coding, even on the server-side and mobile, and real-time monitoring of revenues and performance from a Header Bidding perspective.
With this example, we want to highlight key points essential for publishers. Although our approach is not entirely unbiased, it is based on genuine experiences. We recognise that no solution fits all, and each publisher's situation and needs must be assessed individually.
From an Internal Solution to a Marketable Product
We have been developing Relevant Yield since 2017. Over the years, our development team has grown significantly to better and more quickly meet the needs of our growing customer base. Initially, we started developing Relevant Yield to find a way to report and manage the advertising revenues of about 80 websites more efficiently, reducing manual work. The solution we found on the market was expensive and did not directly meet our needs, so we decided to develop our technology.
Developing the first version took the team about a year, after which we started using Relevant Yield daily. In 2018, we launched version 1.0, which became available to external partners. Responding to user feedback, we continuously developed new features and launched assets to manage Header Bidding and real-time analytics easily. Although the initial investment was significant, offering the product to external customers and acting as a technology provider proved right in the long run.
This strategic choice turned the project into a profitable business, distinguishing it in that many publishers develop reporting capabilities only for internal use. At the same time, our decision to offer the product externally made the project profitable. Initially developed to meet our needs, Relevant Yield is now a valuable tool for many industry digital publishers and advertising networks.
Operational Needs vs. Development
Publishers often face balancing daily operational needs and long-term development goals.
It is common for a data warehouse to be in use, but its usability may be lacking, which can slow down data access and reporting. Solutions like Relevant Yield provide customised reporting according to the user's needs, for example, on the efficiency of sales channels or advertisers' purchases. This significantly improves and speeds up information management for different stakeholders.
On the other hand, the development team may see external solutions as a missed opportunity. In-house development allows for total control and solutions tailored to organisational needs, strongly advocating the benefits of internal development. For developers, new technical challenges and building their tools bring success, emphasising the importance of internal innovation.
Publishers must find a strategic balance that considers the immediate need of operational stakeholders for quick and effective solutions and the development team's aspirations for long-term solutions precisely adapted to organisational needs. This balancing act requires carefully assessing the benefits and challenges of both options to make decisions that support the organisation's short—and long-term goals.
The Real Costs and Management Challenges
The process is not always straightforward when publishers consider developing technology versus acquiring ready-made products.
Sometimes, the development team can quickly reject a project if it doesn't interest them, is too large, or falls outside their core competencies. This can lead to the team focusing only on core business projects and overlooking the opportunities offered by external technology providers.
However, development teams often underestimate the requirements of a project, mainly due to a lack of knowledge in the programmatic advertising environment or focusing on the possibilities of development rather than considering whether development is sensible at all. For instance, assuming that a developer could create a product that matches our offered features in three months is unrealistic and overlooks the need for ongoing development and updates.
The following challenges highlight the risks of in-house development:
- The actual duration of a development project often exceeds preliminary estimates, especially without a deep understanding of programmatic advertising.
- Ceasing development after the initial phase quickly leads to feature obsolescence.
- No support is available for the product, which complicates the adoption of new features and can lead to a loss of expertise as personnel change.
- Meeting the needs of operational stakeholders for new features or fixes requires ongoing negotiations with the development team.
In the dynamic programmatic advertising environment, flexibility and the ability to leverage new revenue streams are critical, necessitating continuous development. This challenges the perception of the economic and administrative advantages of in-house development.
Based on our experience, considering the actual costs and timelines of development, acquiring ready-made products like Relevant Yield provides publishers with an immediately usable solution with ongoing development and support. This reduces development risks and ensures the technology is up-to-date and tailored to meet the specific needs of programmatic advertising.
While maintaining control over one's technology stack may be necessary for some large publishers, it's crucial to carefully evaluate how technology investments support business objectives and the ability to innovate. Acquiring ready-made solutions can offer flexibility, efficiency, and a competitive edge, while still allowing influence over the product's development direction.
The Strategic Significance of Technology Solutions
Technology decisions are not merely operational choices but are crucial strategic moves that can define a publisher's position in the digital landscape.
By selecting the right technology, publishers can automate manual processes and unlock new opportunities for more effective commercialisation of ad inventory. This requires flexible solutions that quickly adapt to changing market trends and consumer expectations.
Publishers need to assess how technology investments support current and future needs in the decision-making process. Developing one's technologies can offer unique benefits, such as more profound data control and precise function customisation, but it also demands significant resources and long-term commitment. On the other hand, adopting ready-made technologies can accelerate the implementation of innovations, reduce the need for initial investments, and provide not just software but also essential expertise and support.
The primary task of the decision-maker is to make the best possible decision for the publishing organisation. This means focusing on "Is this sensible for us?" rather than "Can we do this?" It involves considering financial factors, long-term strategic goals, and the needs and expectations of various stakeholders. It's essential to evaluate whether processing programmatic data in-house is a core activity of the organisation or if development time and resources would be better directed elsewhere to differentiate from competitors.
Large publishers have the resources to build almost anything, but it's crucial to identify what they should do. While the passion for development is understandable, the organisation's best interest defines the final course of action.
