Why sales is about value creation, not deal creation.
It’s funny to work in ad tech. We are an industry of complexities built on concepts of simplicity. We are an industry of intermediaries built with the purpose of connecting principals. We create and perpetuate ideas we know might be wrong only because we haven’t discovered the right ideas yet. But when we stumble across a concept that works, we dive in head first and headstrong with the kind of abandon that only entrepreneurs and inventors can muster and maintain.
And man do we love acronyms.
Jay Sears was likely first, but not last, to ask of our industry, “RTB, DSP, SSP…WTF?” Add to the list OVP, CPC, CPA, RPM, RPV, CTR, and all the rest, and we have somehow reduced an entire technology vertical down to three letters. The three letter acronym. The TLA. But alas, Jay Sears did not invent the most important TLA. Nor Brian O’Kelley, nor even our friends at…….the IAB (TLA, of course). No, the most important TLA of all was delivered on the silver screen many years ago, by a man of one name — Blake. And Blake taught us all that the most important TLA was the simplest: ABC. A — Always. B — Be. C — Closing. Always Be Closing. ALWAYS Be Closing.
And ABC matters. Deals don’t close themselves, and in an industry like ad tech where everything is hyper-commoditized, hyper-competitive, and sometimes just plain hyper, the best organizations have been the one constantly dealing and moving forward, like a great white shark hunting for the sale with a sense of divine purpose. Client lists and top line revenue are the trophy catches; travel & entertainment budgets the chum in the water.
Deals power growth, and any good entrepreneur knows that growth is the responsibility owed to shareholders (both at the board level and employees). But our industry is beginning to mature. We have 20+ years of history to contend with; not all of it positive. Outside ad tech investment has dried up and IPO as a liquidity strategy is no longer viable for many firms. Most importantly, our clients — publishers and advertisers — have come to understand the relative value of ad technology as part of…but not ALL of….their digital media strategy. Publishers and advertisers HAVE their ad tech infrastructure in place.
So if capital is slowing, the market is maturing, and clients are wise to what we’re selling, the question becomes this: how does a platform win the deal? How do they keep their ABC machine moving?
The answer is that we change the most important acronym of all. The answer is that we stop thinking about total deal flow and top line revenue, and start thinking about ACV: Always Create Value. A — Always. C — Create. V — Value. Always Create Value. ALWAYS Create Value.
ACV is a simple idea that to many readers will elicit the response “Of course!” But listen to sales pitches and listen to industry presentations, and you’ll hear about deals done and technology built. But if you really listen to clients and potential clients, you’ll hear the call for value creation.
It’s value creation for clients that creates value for shareholders.
So it’s time to PUT THAT COFFEE DOWN. That coffee is for value creators. And ad technology companies need to start thinking about their solutions through the lens of creating real value for their customers. What do I mean by ACV? I mean that there are real gaps inside our clients’ business that need to be addressed, and it’s addressing those gaps where value is created, because it’s the gaps in our clients’ businesses where value is lost. There are countless examples of where this occurs: solutions that don’t address the mobile ad spend gap, solutions that don’t address the video gap (too high of a price for creation, yet the true cross-screen killer app), the content discovery gap (Snapchat and FB are trying to address this, but it’s still hard for a user to discover new content), process gaps (ad operations across multiple screens and multiple systems per screen are still slapdash and disjointed for many publishers)…the list goes on and on.
Ad technology companies need to stop thinking of themselves and their own features & benefits, and start thinking about how their solutions actually move their clients’ business forward. They need to start thinking about how their clients value technology solutions NOT through the lens of CPM, but through the lens of strategic growth and gain of market share.
ACV means thinking about how solutions create meaningful value for clients’ long term business plans, and it means positioning deals not as a technology partnerships, but as business partnerships — built for the long term and built to address more than just unsold ads. Value creation creates strong, robust platforms that can address more than just a temporary gap in revenue, but instead create true growth in our clients business. Value creation powers long term partnerships, it overcomes the inertia that comes with ad tech replacement costs, and it is what will guide companies to long term growth.
Choose ABC at your own risk. Because first prize for those that follow ACV is a Cadillac. Second prize is a set of steak knives. Third prize is…..well, I think you know how it ends.