Platform Strategy
A leading player in Internet technology, services, and content enlisted SDG’s help to define a platform strategy for web advertising. Despite a strong position in display advertising, the company had been outsourcing targeted ads (e.g. contextual, behavioral, and demographic) across its several large web properties. Although the company had the R&D capability to launch an in-house solution, corporate leaders were divided on whether or not such a move would create higher profitability than outsourcing through a specialist provider.
SDG led a joint team with representation from marketing, engineering, and ad-account sales to analyze and evaluate the opportunity for a homegrown ad-services platform. A sophisticated revenue model clarified the drivers of advertising revenue. We demonstrated that ad relevance and ad quality were more significant than the number of advertisers participating in a marketplace. Launching the new platform would result in a temporary dip in revenues as initial advertisers were recruited –- but higher click-through rates would rapidly reverse the situation, and both revenues and profits would increase.
In addition, the new platform created upside opportunities associated with:
- Increasing the sophistication of the company’s display ad placement
- Building a business in providing targeted ads to third-party web sites.
The client pursued aggressive development and launch of the platform, and SDG was retained to transfer the revenue model and train internal staff on value-based approaches to product strategy.
