Adlogix is a solution provider to the online publishing industry, more specifically providing a process optimization solution for the premium digital advertising sales and operation cycle.
We are often confronted with the complexity of explaining the true central nervous system of Adlogix’ solution: the Active Inventory Management.
Just to be clear, in this article we are not talking about the inventory management capabilities or functionalities of the ad server, but rather the inventory capabilities inside Adlogix. This is very different since Adlogix’s Active Inventory Management also takes into account sales data (offers, options, reservations…) and therefore has a better view of your future inventory availabilities.
Adlogix has a two way connection with the ad server, import historical traffic data and export confirmed campaign parameters (program the ad server).
To fully understand the capabilities of our Active Inventory Management, we’ll start by describing what the traditional and current solutions provide in the field of online advertising operations management and more specifically in the area of inventory management.
The “Spreadsheet Method”
In the “traditional” online advertising sales cycle, sales teams would maintain a spreadsheet, showing what products where available for sale in a given period. This spreadsheet would be updated weekly or monthly, based on the ad server statistics and based on the products available for sale.
No need to say this was (is) disastrous on a point of view of inventory management. At best, this might give you an indication of what you could eventually sell in a static, linear environment.
Forget scalability, forget transparency, forget efficiency. Forget inventory management all together.
Hello over-deliveries and under-deliveries, hello operational headaches.
Sales and process management software
As digital advertising revenue becomes a more and more strategic revenue driver for many publishers, they start investing in sales and process management software. This software helps publishers to streamline the process from sales to revenue collection. There are a few “pure players” in this market and many more cross-over solutions like customized crm tools, systems created initially for other media or in-house built applications. These solutions do improve the operational efficiency of the overall process as they are a certain improvement compared to the spreadsheet based method. While some of the proposed solutions focus on the pure sales/crm functionalities others are more post-sales or contract management oriented. The “non-pure players” however, often solve some of the apparent problems of one team (often sales), while pushing the real process problems to the next team in the process (often adops).
The “pure players”: first generation
The “pure players”, which are the solutions build from the ground up dedicated to the digital advertising process, tend to provide an end to end solution, from sales to revenue collection. The goal is to assist the different departments in the digital advertising eco system to execute their jobs, automate where possible and remove data duplication and data redundancy. The “pure solution” is an ERP dedicated to the digital advertising eco system, it’s connected to your ad server, billing system, crm, BI,…
One of the core competences of such a “pure player solution” should be inventory management.
If you want to be able to optimize your revenue and your process, you need to have a good visibility and excellent management capabilities of the products you can sell; which constitutes your inventory.
The major problem here is the complexity this involves. Digital advertising is a dynamic environment and there are many different types of products to manage. Your “stock” of available ad impressions for sale is not a certified value and it changes from day to day, impacting your product delivery capabilities.
First generation pure player solutions have made good progress improving the process and inventory management capabilities. They tackle the inventory problem as a 2 dimensional problem, where the challenge is to fill a pre-defined inventory volume with pre-defined products.
Sort of like the Tetris game. Every Tetris block represents a product and the goal is
to fill the Tetris canvas with as many products as possible.
This also shows the weakness of this model: it is static. It often assumes that the total available volume (the Tetris canvas) is fixed over a period of time (day, week) and it operates in a model where once the products are sold, they no longer change their inventory occupancy. In the Tetris analogy, once the blocks are dropped, their position and size doesn’t change during the rest of the game.
This operating model however, does not come close to the reality of inventory usage and inventory distribution in the digital advertising industry.
First of all, the reality is that the inventory volume (the Tetris canvas) changes every day and there is no way to have a 100% certitude about tomorrows inventory volume. So you need to be able to manage your inventory assuming that every new day will be different and will impact your inventory usage calculations. More importantly, products might have different priorities that need to be respected during delivery; this obviously impacts your inventory allocation. This also means that your product’s inventory occupancy will change over time as new products (with higher or lower priorities) are sold or if your delivery behaves differently than initially expected (more or less delivery on a certain day). In the Tetris analogy, once the blocks are dropped (the products are sold), the canvas size will change (the inventory will change) daily and therefor the position and size of the blocks will have to change accordingly (your calculated product delivery patters will have to adapt to product priorities and the available inventory)!
Second generation : Active Inventory Management
This is where Adlogix’ Active Inventory Management comes in. Adlogix constantly recalculates the available inventory taking into account, product priority, product type, actual delivery….
This means that if you sell a product, Adlogix will recalculate the inventory usage of all products with a lower priority than the one you just sold, to ensure the delivery of all these products is still possible or to visualize eventual expected delivery problems in the future.
This also means that if, for some reason, the actual delivery of a product is not as expected in the initial calculations, Adlogix will calculate the impact of this delivery delta over the remaining campaign period and over all other campaigns that are impacted by this.
In the Tetris example, our Active Inventory Management would be the software allowing you to play and win a 3D-Tetris game, where the 3D Tetris canvas/box would constantly change shape and the player would have an infinite number of custom shaped blocks to fill the ever changing shape of the Tetris box.
The net result of Active Inventory Management is revenue optimization, inventory maximization, visibility and assurance.
This is true inventory management as it should be. It helps you to harvest the revenue potential of your inventory, as it allows you to accurately manage your inventory availabilities and it allows you to anticipate possible inventory problems.
This means your clients, the advertisers, will be served better what ultimately leads to even more advertising money flowing to your company.
This is what we see happening with our clients.
Active Inventory Management is the only form of inventory management that will allow you, as a digital publisher, to prepare for the future. It is a matter of getting close to reality and the digital advertising reality is surely not representable by a spreadsheet nor a two dimensional Tetris board.
If you have any questions about this topic or if you would like more information about Adlogix, please contact us via our website or call our office : + 32 2 400 75 00
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About Adlogix :
Adlogix is an online advertising resource management solution. It works in conjunction with our clients’ ad server and allows them to streamline the process of selling and managing premium online advertising space. We integrate data from any ad server (OAS, DART, HELIOS IQ, Atlas,….), but also from other legacy systems (SAP, Dynamics, …).
We help our clients – mostly large publishers and publisher networks – to integrate the process of selling premium online advertising space with their overall business process.
We provide them the tools to accurately manage and sell their inventory of available advertising positions and to optimize their operational flows.
Sales teams can easily create and follow up campaigns, while ad operations teams benefit from automated campaign trafficking.
This process optimization results directly in revenue maximization and cost minimization.
Summarized:
- Sales & Order Process management
- Inventory management (sold & unsold inventory)
- Management Business reporting tools
- Campaign trafficking tools
- Complementary to ad server solution, integratable with legacy systems (CRM, billing,…)
Need more information? Go to our website www.adlogix.eu or contact us.
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