Selling Digital Advertising Solutions is More Complex than Ever: Should You Build or Buy a Digital Order Management System?

Selling digital advertising solutions is more complex than ever.  This complexity is most evident in the product catalogs, pricing, booking, activation, and billing of orders.  Media companies are challenged with an ever-growing product catalog, ad formats, buying channels, and multiple ad servers.  As media companies evaluate how to manage this complexity while increasing productivity and lowering costs, they often consider whether to build or buy a digital order management system (OMS).  In this blog, we’ll unpack the key criteria for evaluating which path to go down.

Should you build or buy?

Today’s digital OMS market offers media companies compelling options for managing the order-to-cash processes.  Not all OMS systems are appropriate for every media company, so it’s advised to document your requirements as the criteria for evaluating providers.  Sometimes before starting an evaluation or during, companies may struggle with whether their unique media complexity is best met by building an OMS or buying one.  The following criteria should be part of that analysis. 

·   Strategic Fit. The first question to consider is your company successful at building complex internal products. The best way to answer if you’re successful is – do at least 90% of internal products and tools get delivered on time, with high quality and high user adoption.  If you do, then building may be a path forward; if you don’t, it’s probably best to stop thinking of building your own solution.  You’ll also want to decide what business you want to be in – would you rather be a customer of the electric company investing in innovative solutions using the electricity (the buying path) or building and operating the power plants without the needed resourcing for innovative work using electricity? 

·   Resourcing. Do you have the functional and technical resources to build your own solution?  On the functional side, do you have the right business expertise and time to commit to a multi-year project designing workflows, documenting requirements, testing, and so on?  On the technical side, do you have the right UX/UI, product managers, engineers, QA, project managers, and so on?  And can you commit to staffing those roles in perpetuity, or will those resources have high turnover wanting to work on sexier, consumer-facing products?  Committing to a build path requires effective resource recruiting and retention, or in-house solutions will be impaired by quality and speed to deliver features and fixes, ultimately impacting the business team’s performance and adding costs.

·   Total Cost of Ownership (TCO). Having the right budget is key whether you build or buy.  Oftentimes building is more difficult to estimate due to the unknowns of how long it will take to build an MVP vs. the full roadmap of features.  When evaluating costs, build TCO is best viewed on a 5-year basis as custom digital OMS’s often take 2-3 years for an MVP and upwards of 5 years to reach parity with commercially available OMS systems.  The TCO should include hardware/hosting, software (development tools, testing tools, ci/cd, etc.), and human resources (developers, product management, QA, DevOps, etc.).

·   Support & Maintenance. When building internal products, it’s easy to think that there’s a limited roadmap of capabilities, and once delivered, resources can be diverted to other projects.  Oftentimes that’s not the case, as the digital ecosystem and business needs continue to require new features.  And once a system is live, it’s important to determine the resource allocation between support, bug fixes, and data scrubs vs. new features.  A proprietary OMS will be complex and take time to stabilize once live, creating tension between new features and supporting existing features.  Failure to commit to ongoing support and maintenance at proper staffing levels will impair user adoption or worse.  And plan for continual maintenance, such as frequent API version changes from Google’s GAM APIs which require precious development and test resources to react to required changes.

·   Time to Value. One of the most important elements of the calculus for a build vs. buy decision is the ROI payback time.  Purchased OMS products typically produce payback within 6 months of go-live.  Using that as a benchmark, add 6 months to the time to release the MVP, layer in the costs, and calculate the payback.  Is the ROI payback time frame acceptable to the business unit owner?  Will the business need to add additional costs and resources to scale the business until the payback period? Will they need to offset better campaign margins or completion rates or delayed payments due to billing discrepancies?  Better to have these conversations up front that suffer escalating hidden costs.

·   Best Practices. If your media business is fairly simple, knowing best practices and how other peers are solving problems isn’t relevant but then you probably wouldn’t be considering building your own OMS.  It’s likely that whatever challenges you face now and in the future, you’re not alone, so how do you take advantage of best practices that can be implemented in your OMS in a build decision?  Seemingly simple concepts such as efficient product catalog design and implementing the IO and Programmatic Guaranteed channels together vs. separately can take time and iterations to get correct.  You’ll want to think about whether your business has the appetite for experimentation and iteration time vs. taking advantage of battle-tested capabilities.

Depending on the complexity of your business, you may find a commercially available digital OMS has 70-95% of the needed functionality.  The remaining gaps need to be solved by someone – the vendor, your team, or a hybrid.  Knowing that effort, the TCO and ROI payback times for both options are table stakes.  We hope the additional elements discussed in this blog help make an informed, holistic decision.  Both building and buying are viable alternatives.  It’s important to make the decision with both eyes open and set expectations properly because the business depends on it.

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