Déjà Vu: The Partner Curse

Screen Shot 2017-11-30 at 8.32.17 AMI’m sure you’ve read about Hyphbot, but if you haven’t, here’s a good piece at The Drum which you should read. In the article, this line from Jay Stevens, the Adform CRO, hit me:

“Premium publishers, like the FT are hyper-sensitive to this and they only have two trusted exchanges they allow [to resell their inventory],” he says.

“But then you go to other premium publishers [look through their ads.txt file] and it’s like a whole laundry list of every SSP and their brother, and their dog, that’s allowed to sell their inventory.”

It’s the “partner” curse, which marketers seem to constantly fall for. The pitch is that with more partners (heaven forbid, not “vendors”), you’ll collaboratively and more easily get more coverage of the market and sell more stuff.

That approach works in retail and B2B-type goods, such as networked printers. There are problems and channel conflict is a constant headache, but the actions of all the players are in the open. You can usually see when a channel partner isn’t playing by the rules, or is doing something tricky to game your MDF allocations.

In digital you can’t see or understand who’s touching your marketing and you don’t even know who’s got their hand in your pocket until it’s too late.

We’ve seen these problems with “partners” for years, going back to the early days of affiliate marketing. Remember the pay-for-peformance links? Yuck. I was also reminded yesterday of the old problem of letting partners bid on your branded keywords in search.

The theory in search is that, by allowing your affiliates to bid on your terms, you can move to a pure CPA model.  Collectively, you’ll all get your fair share of market demand and at a known cost. But after you’ve brought on a few partners you realize they all have a fiduciary responsibility to maximize their profits. Your “partners” are in the business of pulling as much out of your pocket as they can, and you have no idea how to fix or optimize it, short of taking all marketing back in house.*

I think the partner curse is driven by laziness. We’d like to believe that we can reap the benefits of sales, revenue, and profit maximization without having to do much real work, aside from business development and contracts. We can forget the blocking and tackling of segmentation, targeting, and checking every ad for consistency and quality. Maybe only marketers fall for this. We’d have never gone to the moon on Apollo with a supply chain like we have in digital media.

Takeaway: The larger the number of “partners,” the more careful you have to be. Track everything and trust no vendor or partner. Tighten your supply chain. And win.

*And you probably should, as I wrote on the topic a few years back.

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