Be More Benefit and Less Feature
Published: December 6, 2012
Author: Sean Nowlin
You’ll have to learn how to be somebody’s superhero to ward off commoditization.
Let’s state the obvious and get it out of the way. Over the past 5 years, there was an explosion in display ad tech. The display LUMAscape became a vast, complicated land. Many people have written (ahem) about the need for consolidation in the display industry. Some of the players have been acquired; others have simply continued to exist with no real growth opportunities. More recently, Google has decided to include features in their stack that had previously been the domain of specialized services. This means the display LUMAscape is going to start being a little less congested.
Earlier this year, Google announced they were adding verification as a feature of DoubleClick for Advertisers. Having had a look at this feature and compared it against experiences with the stand-alone service vendors, I can say that Google’s approach starts out as a pretty basic tool. However, therein lies the problem. Advertisers and agencies will now have to weigh the benefits of paying for a more premium service vs. what you get for free from Google. As in most cases, free probably wins.
Case in point: AdSafe rebranding itself and pivoting away from being a verification service. Verification was really never meant to be a stand-alone service. However, as we have seen with available funding, many features end up becoming a business anyway. Many advertisers didn’t even know (or believe) they needed a verification tool. Unfortunately for the verification companies, these advertisers will figure the answer out using a free tool instead of paying premium.
Another example of Google commoditizing a service happened more recently with the introduction of Google Tag Manager. Virtually overnight, an entire segment was put on watch. Existing tag manager services are now faced with the same dilemma: pivot or try to make a game out of it. As we saw in the verification space, most of them will pivot away completely or add other services to complement their offering.
BE A BENEFIT
The whole point of this is the need to learn to be a benefit and not a feature. This can apply to any level: organizational, team, or even personal. Simply providing a service that can become easily commoditized is never enough; you have to figure out a unique way to add value. In today’s world, there isn’t enough innovation on the scale of Intel, SpaceX, or Henry Ford. Too many companies have come to market with niche ideas in hopes of hitting a Powerball jackpot.
This might seem like common sense, but it happens all the time: companies get bogged down in the minutiae of generating revenue and profit but forget to differentiate. Think big picture about how to become indispensable. Make it so that customers will have a very hard time deciding to switch and use a competing product or service (free or otherwise).
Make sure you focus on becoming a value-added resource. Otherwise, Google might wake up one day and decide to commoditize you.
– Sean Nowlin, Sr. Display Media Buyer