Yaniv Mualem, Director of Product Management
28.11.2023
Build vs. Buy: Getting to the Bottom of the Dilemma
In today’s digital age, programmatic advertising has become an integral part of the advertising ecosystem. Publishers are continually searching for ways to optimize their ad inventory.Â
It’s a challenging task that requires a combination of technology, data analysis, and strategic decision-making. While some publishers may consider building their own in-house solutions for managing ad inventory, buying a solution from a specialized ad tech company often might be the wiser choice.
In this blog, I’ll explore the dos and don’ts of ad inventory management, and explain why opting for a ready-made solution is in most cases the smarter move.
Building In-House: The Appeal of Open Source
Building an in-house programmatic advertising solution from scratch may sound appealing for various reasons. One of the main draws is the idea of using open-source technologies. Open source provides access to a wealth of tools, libraries, and resources, which can be cost-effective in the long run. However, building in-house is not as straightforward as it might seem.
Let’s dive into the challenges of building an in-house solution to manage your ad inventory. You might think that it’s enough to have a technical affine employee who knows his ways around open source codes. The truth is that you’ll need a highly skilled and experienced R&D team. These individuals need a deep understanding of the industry, their customers’ pain points, and an overall understanding of industry trends. But that’s not enough. They also need a deep understanding of artificial intelligence and machine learning. Hiring such an expert team can be very time intensive and expensive.
Another challenge that comes along with building an in-house solution to manage ad inventory is the sum of data that’s needed to succeed in building a powerful in-house solution. Successful programmatic advertising relies on large datasets and accurate data analysis. This means that publishers must have access to substantial volumes of quality data to train models and optimize ad placements. This data can be costly to collect, analyze, and maintain.
I’ve mentioned it before, but building your own in-house solution from scratch might be very time consuming and expensive. This includes costs to set up the infrastructure, collect, and maintain the needed data. This doesn’t include salaries for skilled professionals. On top, it may take years to develop a competitive solution.
Buying Pre-Existing Solutions
Purchasing a programmatic advertising solution, whether through software providers or third-party vendors, can provide publishers with several important benefits. Let’s dive into the advantages of buying a pre-existing solution. One benefit of buying a pre-existing solution is time to market, because it reduces the time required to start placing ads effectively and improving revenue. This is especially true in the fast-paced world of digital advertising.Â
Another benefit of buying a pre-existing solution is the excess of expertise. Ad tech vendors often come with a team of experts who have already done the heavy lifting. Meaning, they have the skills and knowledge to optimize ad placements, leaving publishers to focus on their core competencies.
Yet another indispensable advantage is the access to a vast pool of data resources that’s needed to leverage ad place optimization as well as skilled employees to analyze and maintain this data. So, being able to rely on data resources of third parties saves publishers valuable time, cost, and effort of gathering and maintaining their own data. Not to mention the cost predictability, purchasing a solution often provides well-defined pricing structures which helps publishers manage their budgets more effectively.
Boost your revenue
The “build vs. buy” dilemma in programmatic advertising is not a one-size-fits-all decision. While the allure of open source and building in-house solutions may be appealing, it’s essential to consider the substantial challenges and resource requirements involved. Building a programmatic advertising solution from scratch demands a highly skilled R&D team, significant data resources, and substantial time and cost investments.
Buying pre-existing solutions can provide publishers with faster time-to-market, access to expertise, and cost predictability. This allows publishers to focus on their core competencies while leaving the complexities of programmatic advertising to specialized vendors.
Ultimately, the decision should be based on a careful assessment of a publisher’s specific needs, budget, and long-term goals. It’s essential to weigh the advantages and challenges of each approach to make an informed choice that best suits the unique requirements of the advertising ecosystem.Â