Buy vs. DIY: Considerations for Scaling Your Ad Network

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The question of whether to buy a performance marketing platform or develop core capabilities in-house is central to every ad network. For network owners and CTOs, it’s a decision with direct impact on short and long-term business growth. This e-book will illustrate how successful ad networks are navigating a range of cost, resourcing, and risk management factors to make informed infrastructure decisions. It is applicable to those just getting started, as well as companies seeking to migrate their existing tracking technology to a new platform.

Since HasOffers entered the performance marketing industry in 2009, we’ve heard dozens of reasons for and against developing a tracking platform in-house. Those who develop in-house often mention control and feature prioritization among their driving influences. While both are important, we’ve also noted an abundance of negative repercussions for ad networks that take the “develop it yourself” approach. In the sections that follow, we’ll highlight the pros and cons of Buy vs. DIY and how you can make the best decision for your business.

Before diving into the opportunity costs of Buy vs. DIY, it’s worth reviewing the top benefits all tracking platforms should deliver:

Development time is one of the largest tradeoffs ad networks face when comparing Buy vs. DIY. For example, developing core tracking, reporting, and payment platform functionality often requires at least six months of full-time focus for 2–3 engineers and an additional 75% of their time post-deployment for daily maintenance. Barring the need for exceptionally unique capabilities and massive network volume, these are investments that seldom pay off. Another important factor is the time required to bring a new platform to market and help users familiarize themselves with key functions. As above, to those for whom the need for customization supersedes time-to-market, developing in-house (DIY) provides the freedom to own 100% of the desired product feature set. Alternatively, for networks focused on generating revenue as fast as possible, a leading third-party tracking solution should be expected to accelerate time-to-market and be both flexible and easy to learn. Here’s a summary of the biggest time-influenced upsides and downsides of Buy vs. DIY:

To learn more about how ad network managers benefit from buying the HasOffers platform rather than developing an in-house solution, we asked 70 customers which core capabilities save them the most time and money. Their responses were as follows:

1. Conversion tracking (97%)
2. Creating and using custom tracking links (86%)
3. Customizable reporting (51%)
4. Publisher management (46%)
5. Affiliate interface (46%)

Combining survey data with direct quotes reinforces the time and money benefits of buying rather than developing the foundational tracking technology ad network owners need:

For many ad networks, upfront costs tend to be higher when developing core functionality themselves rather than buying an out-of-the-box solution. From developer salaries and signing bonuses to tech, office space, servers, domains, SSL certificates and more, the costs can be prohibitively detrimental to ROI.

As illustrated in the bullet points below and the interactive graphic later in this e-book, cost drivers vary widely for Buy vs. DIY and depend in large part upon the following key variables*:

• Server uptime/downtime: Infrastructure investment needs directly relate to server uptime commitments, a dynamic that networks dedicated to best-in-class service levels must take into account. For example, in a DIY scenario an ad network’s upfront server costs can be 67% higher to deliver 99.999% versus 99.9% uptime. In a Buy scenario, these costs are included in monthly service charges.
• Number of countries: The more countries and regions in which a network’s publishers are running, the more servers are needed. This additional complexity can add up to 27% in incremental setup costs for a network pursuing a DIY strategy and running in 15 markets versus 1-5 markets. Alternatively, for those electing to Buy, these fees are also accounted for in upfront setup charges.
• Engineering: For a typical ad network, three full-time engineers are typically required to devote six months to developing automated tracking capabilities. Depending upon the market for engineering talent, this upfront investment can range from $120,000 to over $150,000 USD. Networks choosing to Buy rather than DIY can take advantage of ready-to-go technology available at a fraction of the setup cost.

(*Note: Estimates are based upon HasOffers data and experience.)

Ad network owners realize that platform maintenance and related ongoing costs can be a profit-crushing nemesis. Given how important it is to effectively utilize and manage engineers, ongoing costs can also have a negative impact on strategic investments. In our experience, too many network owners and CTOs underestimate the risk and expense of recovering tracking data when servers go down, daily server scaling, data archiving and retention, and other variable costs that can spike at the least opportune moments. Here’s a snapshot of how we frame the upside and downside of Buy vs. DIY with respect to ongoing costs:

Many network owners frame their ongoing costs by taking into account the following variables*:

• Server uptime/downtime: Service level agreements (SLAs) have a direct influence on ongoing costs, which can spike for DIY networks during platform outages. Again, the difference between 99.9% and 99.999% uptime can be significant, in many instances increasing maintenance costs by 50%. Couple these costs with the time required to monitor SLAs and DIY networks often experience lower margins than if they chose to Buy the same capabilities from a third party.
  
  
• Number of countries: Maintenance needs increase with the number of countries served by an ad network. Similar to related upfront costs, ongoing maintenance can add over 25% in incremental charges for a network with a DIY strategy and running in 15 markets versus 1-5 markets. While Buy costs also rise with additional market coverage, the increases are often more predictable than in the DIY case.
  
  
• Engineering: Ad network support costs for DIY scenarios also increase as a function of uptime and click volume, and can range from approximately 120 monthly hours for a network generating 1-5 million monthly clicks on 99.9% uptime in 1 country to 432 monthly hours for a network generating 25-100 million monthly clicks on 99.999% uptime in 5-10 countries. As highlighted elsewhere, Buy options help keep scaling costs such as these more predictable and lower than they might otherwise be.
  
  
• Industry vertical: It’s critical for ad network leaders to take into account the relationship between industry verticals and data volumes. Verticals with a high conversion rate and low cost/lead tend to generate high volumes of data, which can make it costly for networks to process conversion events. For example, total ongoing DIY costs can vary by as much as 75% based on industry vertical. While variability also exists for those operating in the Buy scenario, accommodating industry-related data volumes is more seamless (and far less stressful).

(*Note: Estimates are based upon HasOffers data and experience.)