The Death of CPQ: A New Era for Media and Ad Sales

Introduction

CPQ (Configure Price Quote) has been a mainstay solution for quoting and order entry across many industries.  While the technology has matured, it’s also plateaued and is being deprecated by some of the largest CRM vendors.  What started as a Swiss Army Knife approach has evolved into highly complex, expensive software riddled with adoption issues.  In this blog, we’ll discuss the challenges with CPQ solutions, whether it will survive or die, and how to solve quoting and order entry in the media and ad sales industry.

CPQ Background‍

Sometime in the early 2000’s CPQ (Configure Price Quote) technology emerged as the defacto technology for capturing the “perfect order”.  Its main goal was to eliminate order entry errors for industries with part compatibility complexities.  The author of this blog got a taste of its promise in 2001, installing the Siebel CPQ for Gateway computers.  Back in the day, humans had to call into a call center and talk to someone who used a CPQ to configure a computer that could actually be built, ie, the memory, CPU, disk drive, and so on, would all be compatible with the chassis, and then compute a price.  Prior to CPQ, this was all done by hand using manuals, resulting in order entry errors where humans would cobble parts together that aren’t compatible.  That made CPQ special.  The technology evolved over the last 20 years, trying to take on more challenges around quoting and ordering; however, feature bloat lead to its demise.

Challenges with traditional CPQ solutions

Since the beginning of CPQ, it has had many challenges, including:

1. Performance issues - large product catalogs or complex configurations can slow down CPQ systems, frustrating users and delaying quote delivery to customers.
2. Complex product & pricing models - Businesses with intricate pricing structures (e.g., discounts, bundles, or subscriptions) may struggle to configure CPQ systems to handle all scenarios accurately, leading to errors or manual workarounds
3. Implementation expertise - CPQ systems require integration with existing CRM, ERP, and other enterprise systems, which can be time-consuming and technically complex in addition to requiring expertise in configuring the CPQ rules.
4. Integrations - Older systems may not integrate smoothly with modern CPQ platforms, requiring costly middleware or custom development to bridge gaps
5. User Adoption & Training - Sales teams may resist adopting CPQ due to unfamiliarity or perceived complexity. Without proper training and change management, adoption rates can be low, reducing ROI.
6. High Cost of Ownership - Not only is CPQ software expensive, it has many hidden costs to keep the system current as market conditions change, straining IT resources and/or needing expensive consultants.

The future is Verticalized CPQ

At Boostr, we’ve seen and heard many stories of media companies trying to use CPQ to build media plans and orders.  The outcome we hear is the same: fitting a round peg in a square hole doesn’t work.  Building a media plan isn’t an exercise in “parts compatibility” like building a laptop with a variety of part choices, and therein lies the problem.  One of the needs in media planning is inventory availability checking, not something out of the box, typically with CPQ, thus requiring extensive custom coding.  In fact, one of the largest horizontal CPQ vendors recently threw in the towel and is no longer investing in and supporting CPQ for many of the reasons highlighted above.

At Boostr, we think the future of CPQ is more akin to TPQ - Target, Price, Quote, but with intelligence of what should be sold.  Specifically, an ad sales CPQ or TPQ needs to solve the following problems, specific to our industry:

1. Recommended Media - using the advertiser’s object, the CPQ should recommend both what’s best for the advertiser’s outcomes and the publisher’s yield goals.  This is a great use case for AI.
2. Availability Checks - unlike other industries using generic CPQ, many publishers often want to verify the inventory is actually available by product or format.
3. Unified Targeting - buyers want to get their message in front of the intended audience and not be encumbered by how differences in how ad servers, DSPs, and socials represent the same audience.  Hence, a normalized, unified audience definition is a must.
4. Premium Pricing - similar to attribute-based pricing mechanisms in CPQ, publishers often need to apply premiums or uplifts such as Tier 1 DMAs, Behavioral Targeting ,or other features.  These are often priced independently of the product or may be related.
5. Approvals - as quotes or media plans get created, they often need approvals for discounting or other reasons.

These needs are fairly different from off-the-shelf CPQ; it’s not about creating an “error-free order”, which is why we built Proposal-IQ as the industry’s first AI-powered Ad Sales CPQ.  It specifically solves the needs of the modern ad sales organization to recommend the best media plan at the right price and right margin. And getting a plan to the buyer shouldn’t take days; sellers can now respond to the RFP in minutes or hours.

To learn more about Boostr’s verticalized CPQ for Ad Sales, called Proposal-IQ, you can learn more at https://www.boostr.com/proposal-iq or schedule a demo to see it in action by contacting us here.