Publisher Kaizen - A Cultural Shift

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I often use this space to write about the challenges that publishers face; it's a topic that never ends as the life of a publisher today is quite like trying to build a foundation on ever-shifting sands. Be it changes in audience consumption habits, new platforms for engagement, new ad units & platforms, or upstart new media businesses who challenge the old guard of legacy content providers, a day in the life of a publisher is never dull.

I've spent nearly 18 years working with and for publishers, and in that time I've seen trends come and go. But without fail, one challenge is almost always paramount: resource constraints. While ALL businesses are resource constrained somehow, publishers are seemingly constantly constrained in the one area that an outsider would wonder at: constraints around revenue creation.

As a seller of some of the best ad tech in the industry (none that I built - smarter people than I have been the entrepreneurs), I've had the opportunity to build strong and lasting relations with dozens of top publishers. But at every stop in my career, I've faced the exact same challenge: deploying revenue, even GUARANTEED revenue, to publishers who would stand to gain from not just the deals I've brought forward, but from leveraging the underlying technology to power their own direct sales.

Recently I've realized that what publishers are missing isn't just resources - it's an attitude. Publishers often lack an attitude that drives them to innovate in the area of indirect revenue, unlike in direct sales where sellers often drive innovation due to their need to respond to brands looking to stay ahead of customers.

The attitude and approach that is missing is that of Kaizen. Kaizen is the Japanese concept of "constant improvement". It rose to fame when Toyota began to publish research on its' success across not just the boardroom, but the assembly line (down to the janitorial staff). Kaizen involves " a process that, when done correctly, humanizes the workplace, eliminates overly hard work ("muri"), and teaches people how to perform experiments on their work using the scientific method and how to learn to spot and eliminate waste in business processes. In all, the process suggests a humanized approach to workers and to increasing productivity."

The whole idea is that where processes can be achieved more efficiently, a test should be run to try a new and improved way to find success. By empowering individuals to constantly improve their own work, they not only self-direct their own success, but own more of the processes that govern their daily lives. It lets experts in everything - from emptying garbage cans to processing contracts to signing deals - utilize their expertise.

It's a powerful concept, and one that requires a company to truly be in a state of constant improvement. We love to throw around adages like "Move Fast and Break Stuff", but if you don't let employees move fast or break things, what good is the adage in the first place?

Publishers today are in a constant state of bottlenecks:

• Ad tech partners aren't able to be tested because there aren't enough business developers to review them all.

• Sandbox environments aren't ready to constantly spin up and down partners across every platform.

• Ad operations teams carry too much burden and are often backlogged in launching new partners while direct deals take precedent - even if the money at stake is equivalent.

• Engineering & product staffs aren't big enough or aren't dedicated to ad tech, sitting across ALL platforms (CMS, CRM, ad serving, video, etc.) - meaning deals to get accretive revenue flowing sit idle.

Paramount to it all is BUDGET. Cash is king, but publishers too often simply fail at justifying (or ignore altogether) budget for the kinds of efforts that increase individual flexibility and increase revenue flow. This under-investment in testing & operational capabilities is actually an under-investment in revenue & profit creation, since deals sit by the wayside that often require smaller amounts of sales commissions and T&E expenditures (see my previous post about Taking The Deal for more on that).

It is my belief that publishers should rethink & reframe (thanks to John Ruvolo - https://www.linkedin.com/in/johnruvolo - for embedding The Challenger sales technique in my brain) their approach to the ad technology ecosystem. Indirect revenue is simply different than direct selling. It's a constant flow of new deals, new partners, new technologies, and new opportunities that impact the entire organization. It is both a product opportunity and a revenue opportunity, and that means a new, Kaizen-like approach to this line of business.

2017 is around the corner, meaning most publishers are deep in their forecasting & budgeting process. That makes NOW an incredible time to begin building the framework for "Constant Improvement". Below are some suggestions as to where a publisher could start preparing itself for a world of incremental change, and incredible growth:

1. Every programmatic team needs 4 people: deal makers, account managers, analysts, engineers. If you don't have at least these four roles filled right now, begin looking for these assets. Ad tech deals can vary based on price, product, seasonality, and partner - a good team will work in unison to constantly test & tinker to find the optimal mix every month (and it may change month to month).

2. Empower your teams to outsource. There is no shame in outsourcing - in fact there is no reason not to consider outsourcing certain parts of your operational processes. Tag generation, yield analytics, even deal making - if your team can find partners who can incrementally improve process and/or deal flow, at lower costs without impacting overall business objectives, it should be explored. And via a Kaizen approach, empowering your teams to test a multitude of partners for a variety of outsourced tasks allows them to gain valuable vendor management experience.

3. Test more than just tags. A proper sandbox environment should be utilized as a petri dish of revenue growth. From the number of ads per page, to placement of ad slots on the page, to traffic quality/bounce rate, to user experience and more, a publisher needs to constantly be experimenting with how separate elements of the page (across both desktop and mobile) interact with each other to find the optimal experience.

4. Try new vendors - always. The ad technology ecosystem is complicated, which means certain vendors have relationships upstream & downstream that impact what it offers (insofar as advertisers, products, and spend). By setting up a technology testing environment, these new vendors can easily assess what impacts how they will spend (traffic sources, quality, inbound data, cookie overlap, etc.) as the publisher can easily assess the potential value of each new deal.

5. Create a Kaizen budget. This can be used to supplement reduced revenue if a test doesn't work, hire new staff if needed, and reduce risk exposure for higher value deals. It also can be put towards increasing engineering & product resources that will be used to help maintain, run, and evaluate each new process improvement.

This Kaizen approach won't be easy to execute. Kaizen utilizes the scientific process, which means having a hypothesis but understanding that a different result is just as valid as one that confirms the hypothesis. Executing this requires a publisher to have create both an environment where constant testing can happen, and an environment that empowers employees to be objective in looking at outcomes. A "bad" outcome isn't bad at all - it just means that the test proved to be one that didn't cause improvement. Over time, the learnings from these constant improvements will add up and actually foster even more successful tests and knowledge of what works (when, where, why, and how) will become part of the fabric of the culture.

Ad Tech Kaizen is a new way forward for most publishers, but it's also a mechanism to engender employee loyalty, professionally develop key staff, and bring a bit of fun & experimentation to the life of a programmatic publisher. Kaizen truly means "change for better", and in the case of applying a Kaizen approach to ad tech, I have no doubt that the "change" will become "dollars" in no time.