The Future of Self-Serve Ad Platforms

Given recent advertising industry shifts, it is clear that self-service ad-buying platforms will play an important role in the future of the industry. One such shift is Snapchat’s new self-serve ad-management platform, Snapchat Ad Manager. Released in May, the new system will enable businesses of all sizes to self-serve the platform’s various video ad options. Snapchat Ad Manager is the latest in a long line of networks to move toward self-service, including LinkedIn, Facebook and Twitter. Before this release, the only way brands could buy Snapchat ads was through Snap Inc.’s sales team. This process was time consuming and costly—but one that is unfortunately still the norm within the ad-buying space. Businesses looking to advertise on the platform needed to be ready to fork over hundreds of thousands of dollars in exchange for customized campaigns on the application. For such a young company offering this unique, innovative product, it’s unsuitable to have an archaic ad model. While this shift is natural for social, it is one that requires extensive development and preparation. But with the right technology, it could disrupt the entire industry. Here’s a closer look at the evolution of self-serve ad platforms and what this shift means for the future of the ad-buying industry. A natural shift The shift toward self-service ad buying is natural for social media given the way users interact with content freely and the amount of targeting data available. But like Facebook, Snapchat took years to gain ad-free trust among its users before constructing an application-programming interface to support a self-service auction. When Snapchat first started surging in popularity, it was unclear what role brands would play. Loyal users joined the platform in droves, closely followed by advertisers hungry to reach them. As the platform evolved into the video-heavy channel it is today, ads became a clear way forward. Eventually, sales reps began working directly with large advertisers to enable customized campaigns to reach the platform’s millions of followers. These are often costly for the advertiser because of the hours of manual work involved on Snapchat’s end and required significant overhead cost for Snapchat to service. But once the campaign process was in place, Snapchat transitioned to self-service. Everyone’s been there (Google included). Once platforms like Snapchat reach a critical mass, it’s inefficient to continue operating with representatives alone. The benefits of the self-service model for Snapchat are twofold. The platform does not require a minimum ad spend and no longer requires fees associated with campaign management. Therefore, it opens up service for businesses with budgets of all sizes, democratizing access to Snapchat’s ad space while helping to bring in more revenue. Additionally, by offering self-service, Snapchat is able to cut overhead costs. Manually completing these campaigns and working with each advertiser individually was incredibly costly. Automating the entire process cuts down on staff, time and resource costs. This shift is expected to benefit Snapchat in an enormous way. The platform’s advertising business is predicted to reach $1 billion this year. Why not self-serve everything? Given the benefits of Ad Manager, it seems like self-serve ad-buying platforms should be a no-brainer for all channels and media. And it begs the question: Will self-service eventually dominate the ad-buying industry? The answer is yes, but the evolution will take time. This is especially true for broadcast. The ad-buying process for the broadcast industry is old-school (think: calling up a representative to plan which time your ad will air). And because this is so deeply rooted in the culture, it’s not likely that the business model will change soon. In the meantime, digital media like other social networks and retargeting ads are ripe for self-service innovation. Snapchat is just the latest example of the effectiveness of self-service when the time is right. Google AdWords was the first to prove that. What’s more, developing a self-serve platform isn’t easy. These are software platforms that require serious technology investment. But since AdWords, the first auction-based platform, the costs have come down significantly. Given the complexities involved, it will be interesting to see whether the traditional broadcast networks build or partner. Take Disney, for example: Advertisers can buy Disney digital programmatically through platforms like DBM and AOL, or call their Disney rep, who will put together a digital plus premium broadcast package. But when can media buyers build their own end-to-end marketing strategies that include premium broadcast? Does is make sense for Disney to build its own auction or just join the platforms that are already in the market? Both the user base and advertiser base must be in the right place before the business invests in this sort of infrastructure. With the unicorn Snapchat has become in the past four years, that didn't happen overnight. And it certainly won’t happen overnight for broadcast. The self-serve, auction-based model is where our industry is headed. We’re seeing it now associated with social, but with the right technology and partnerships, it’s only a matter of time before it becomes the norm. Patrick McKenna is co-founder and executive chairman of social advertising platform Strike Social. Image courtesy of andresr/iStock.