Joni

About the author :

Joni holds a PhD in marketing. He is currently working as a postdoctoral researcher at Qatar Computing Research Institute and Turku School of Economics. Contact: joolsa (at) utu.fi

Managing business development of an ad platform

english

Here’s a great example of a business development program of an ad platform:

Google provides similar service through its AdWords Partner program. Facebook and Google are offering the free 1-on-1 help for one simple reason:

It improves the quality of ads.

Because of this, two positive effects take place:

a) the users are happier. As two-sided markets, FB and Google need to constantly monitor and improve the experience for both sides, users and advertisers. Particularly, they need to curb the potential negative indirect network effect resulting from bad ads.

b) the results are better. Most of FB’s +2M advertisers are small businesses and lack expertise – with expert guidance, they will use the funtionalities of the ad platform better and will see better results. This prompts an increased investment in the ads, which increases the platform’s revenues.

Thus, this program is an example of a win-win-win business development program of a platform. The users are shown better ads, the advertiser gets better results and the platform increases its revenue. Given that FB and Google conduct some “lead scoring” to choose the advertisers with the most growth potential, the ROI of these efforts is almost certainly positive.

Conclusion

With these programs, FB and Google are once again beating the traditional media industry that has very weak support in managing online advertising. Basically, no interest in the client after getting the money. To do better in competition, traditional publishers need to help their clients optimize and increase the quality of their ads, as well as improve their core technology to close the gap between them and FB and Google.

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