Net 30 Payments and Other Lies, Part 1

Let's talk about truth, justice, and the ad operations way.

I'm a fan of hot, sweet justice in all of its forms. I watched Revenge even when it got bad, Kill Bill's The Bride is my go-to spirit animal, and if someone cuts me off on the highway only to be pulled over by a cop a mile up the road (THIS HAS ACTUALLY HAPPENED) the satisfaction alone can put me on cloud nine for a whole week. Justice is great. But it's not guaranteed. Most wronged parties don't receive it, and most offenders keep on keeping on.

Fun, sad fact: not everybody is a good human being. There are loads of people out there who want to take advantage of you and have no qualms about doing it. The ad tech space is most certainly not immune to such individuals. Most of us know that you don't accept candy from strangers, you don't get into gypsy cabs, and you don't give your bank account information and social security number to the Nigerian prince who has a great business proposition for you. Most of us can see a sketchy situation for what it is and walk away. But it is easy to forget how to listen to your gut when you have someone in front of you who says they are willing to pay you a ridiculous amount of money to post their ads on your site. You've been waiting for this moment for a long time, and when it happens you err on the side of hope and think you've finally hit your stride.

I'm going to say something now that may shock you. Brace yourselves. 

Every agency lies. Every ad network lies.

This is important to know and understand before you really start dealing with these companies. Most of these lies are generally harmless. Most of the liars have the best of intentions and don't even realize they're doing it. It's just part of the business. Here are some examples of lies I've heard from agencies and ad networks over the years:

• "You're my favorite publisher! I really want to see you succeed."
• "We can definitely monetize better than your other partners."
• "Yeah, we can get you creatives at least five business days before launch."
• "With our top-tier brands, we can guarantee that our creatives will be of the highest quality."

And my personal favorite:

• "We pay net 30."

A lot of quality ad networks will be able to abide by the net terms on the contract, but some won't, and you will hear every excuse under the sun as to why they aren't paying on time. Agencies DEFINITELY won't. Ninety percent of payments made to my publishers are late by some measure. Usually this is not intentional. Agencies are notorious for having poor internal communication. You talk to the account manager, but payment comes from the AP department, and there are several steps in between the two. If you're a larger publisher, it's likely you have a similar set up. On one side or the other, there's usually some miscommunicated approval or requirement that results in a late or incorrect payment. It's just part of ad tech life. It does not make you a bad publisher or make them a bad agency. It just happens. It sucks and you should try everything within your power to close the gaps on your side so you are not the cause of the delay, but know that when it happens YOU ARE NOT ALONE.

Sometimes a delayed payment to you is a result of a chain of delayed payment. A popular addition to most contracts is the "we don't pay you if we don't get paid" clause, used by agencies and ad networks alike. Not groundbreaking or unusual, this idea totally makes sense, but sucks in practice. And you probably can't do anything about it. 

Know that as the publisher, you are the perpetual holder of the short stick. Everything in the industry is geared towards making the advertiser happy, providing the advertiser with data, giving the advertiser the tools to succeed. The publisher is truly at the bottom of the totem pole, providing the industry with the very ability to exist but constantly overlooked in favor of the impressive sections above it. Unless you are lucky enough be a very large publisher, or have a highly desirable and unique audience, get used to being told you're a special snowflake when really you're going to end up working at a retail job and living with three roommates.

From this moment onwards, bathe in the waters of pragmatism and know that you aren't always going to get a fair shake and most everything an ad network or agency says needs to be taken with a salt-rimmed tequila shot. Or five.

Some truth: by supplying someone with ad space on your site, you are extending them credit. You are saying here, take this now, and pay me later. But unlike the credit card companies who do this so well, you don't have much power to seek justice if you aren't properly compensated for that space. You're out the value of that space, and time spent. And it's possible that that's the best case scenario. Worst case: you could also end up losing some users.

A DIRECT-SOLD STORY

At Grooveshark we had a direct sales team of about 6-8 people in the US at any given time. These people were not new to sales. Some of them had been selling for upwards of a decade. But the distinctly human ability to hope that something good FINALLY happened can cloud anybody's judgement, even a savvy salesperson. It was my duty to bring them down from the sales high and protect the company's best interests. It was not fun. Sometimes my sales team didn't like me because I was a huge downer. But it's important to question the things that seem too good to be true...because they usually are. Sometimes I was wrong, and that's okay - it's better to be wrong in those situations than to be SOL later.

There were many times we ultimately didn't get paid for ad space, but there were exactly two times that I could have prevented it and didn't. Both times are a result of misplaced trust and poor due diligence.

Grooveshark's most exciting ad unit was a custom unit called a homepage takeover. Our designers would work closely with the agency to build out custom creatives for the homepage of our site, effectively turning Grooveshark into a platform for the brand with features like custom-built playlists, music festival sweepstakes, and interactive elements. Agencies went crazy over it, and it was the glue of most campaigns, with standard IAB banners thrown in the same way you always get cheddar bay biscuits at Red Lobster.

A few years into my ad operations career someone who claimed to be from Toshiba contacted one of our salespeople, who excitedly came to me with a signed IO for $60,000 worth of standard IAB banner ads over a month. They wanted to start right away. They had given us the creative tag, they had been emailing consistently with the rep, and they were so so so excited to work with us. At that budget size, they could have done a homepage takeover with us, but no, they wanted banners only. Something felt off, but I chose to ignore it. I woke up the morning after it went live to a dozen malware warning emails from DFP, all from the Toshiba campaign that had just gone live. We never heard from them again. I had been taken. And just like Liam Neeson, I was super pissed.

Looking back, I was extremely lucky that it was caught by DFP so quickly. We didn't lose users, and we didn't lose too much revenue from the impressions we gave them. But it was totally preventable by me. I only let it happen again once in my time at Grooveshark (silly mistake), and I'm going to share with you my guide for making sure it doesn't happen to you.

TRUST YOUR GUT

Your gut is extremely useful, and you should listen to it. If something tells you that the deal is weird or "off," cross check it with some of the common red flags associated with bogus campaigns.

• You know your best-selling ad units. If someone wants to buy a buttload of your worst-performing or less-in-demand impressions, its a good sign they are not serious.
• They have a very large budget for a very short flight. This means they want to push out impressions in huge amounts very quickly.
• The campaign goes live on a Friday or Saturday. Days when you're less likely to notice something fishy with their tags, and you might not notice until Monday that something went wrong.
• You're talking directly with someone who claims to work for the brand. Mom and pop shops won't necessarily fall into this category, but most brands use agencies as a middleman to advertise, so if you've been talking directly to Toshiba, chances are the person is full of crap.
• The person you're speaking with doesn't want to chat on the phone. They know they'll be caught if they talk to you, so they "prefer to keep things over email because it's easier" for them.
• The creatives are third-party tags, and when they render the design is overly simplistic or low-quality. Big brands usually have pretty great-looking creatives.

Just because a deal on the table hits one of these points doesn't mean you're dealing with a liar, but if it hits a few, take some measures to protect yourself.

• Take a look on LinkedIn. Can you find this person or anyone else from the company you with whom you can confirm it's a real deal? Toshiba should care that someone is claiming to represent them.
• Do a Google search. If you've never heard of the brand, does a search reveal that they are a real company? Are they on BBB? Does anything come up if you search for brand+scam? Is their website full of stock images and no real contact information like an address or phone number?
• Do a credit check. Asking the rep for their information to perform a credit check might be enough to scare them off.
• Ask for prepayment. It doesn't have to be much, but an argument can be made for a small investment on their part due to them being a brand new advertiser for you. It's a long shot, but if you get the prepayment, that goes a long way to confirming that this is a real deal.

If you're still feeling uneasy, walk away. It's okay not to take a risk with your inventory and your brand. If this was legitimate interest in your audience, there will be other opportunities, I promise.

Thus commences part one. Keep an eye out for part two in which I discuss ad network lies, both large and small, and how to protect yourself.

Until next time.

Jen

Do You Have a Hall Pass?

Growing up, I was a model child. A model daughter, a model student, I did what I was told, obeyed the rules, and always asked permission. Permission to go to the movies, permission to rearrange my bedroom furniture, permission to go to the bathroom at school. I was taught that obedience and deference were positive qualities, that they made me a "good girl." I believe my kindergarten report cards contained some measurement of my ability to "take direction" and "fit in socially," and my entire experience in the public school system was based on steering me towards the path of normalcy via standardized testing and groupthink.

This isn't an uncommon experience. You spend your most formative years in supplication to the world around you, so as an adult it quickly becomes apparent that the skills you've learned have not necessarily prepared you for being a confident and contributing member of society. For your whole life, you have been trained to obey, not to blaze your own path. You've been taught to take direction and follow the leader, skills that are still valued and rewarded by many companies who need drones to stay alive. These companies are large. They are lucrative. They are old. They thrive on hiring the adults who were once recipients of perfect attendance and citizenship awards in primary school.

But they are not doing anything particularly interesting.

As an entrepreneur, you have diverged from the path, probably because you saw a shortcut, or a more scenic route, or maybe you were wearing Nikes so you could run ahead of the pack. Either way, you did something a bit differently, and you're on your right path now; it's time to build out your company with the right people to help take you from inception to sustainability.

Please don't hire the drones.

Creative problem-solver

When people hear the word entrepreneur, they often imagine an individual who starts their own business. Entrepreneurs are intelligent, they are leaders, they enjoy taking risks, and they see the world differently than other people. They can see problems, and they can see ways to solve them. There are many people with these qualities who do not start companies. Hire these people. Develop your employees into being these people.

Anyone who has read The Lean Startup (and you should) or been a part of a failed company knows that founders and executives don't always make the right call. The wrong products are pushed or they don't see the possible consequences of the decisions they've made. When you have one leader and a bunch of followers, the leader only has herself to rely on when it comes to big decisions. That thought can be incredibly appealing, but it's also fairly dangerous. You're as limited as your own knowledge and experience, and your own ability to see potential problems before they become disasters. Surround yourself with knowledgeable, capable, innovative thinkers, and your own limitations can no longer stand in the way of the company's success.

This isn't always easy to do. Most startups and established tech companies profess to nurture such environments through open office spaces, open door policies, and whiteboard paint on the walls, but I have found that the majority of these are surface-level commitments to creativity, transparency, and communication. Just because the physical walls are down does not mean the mental walls have followed. A lot of potential is being wasted because creative, talented employees are too bogged-down in the mire of office politics to speak up when they see a problem or, more importantly, take the reins to develop a solution. More often than not, the culture of permission we have cultivated within our youth ends up backfiring in the workplace. We have all been privy to office gossip, the most damaging of which comes from the "followers."

Followers, after a lifetime of frustration, believe themselves to be martyrs, sacrificing their time working for a company that "just doesn't get it," or managers who "never listen." They complain, breed anger and resentment, and believe themselves to have all the answers. If only someone would see that and give them a management position, all of the company's problems would be solved, right? We've all worked with that guy. Some of us have been that guy. If they really have all of the answers, they should be doing something about it, not just yakking away to their peers about how they wish they could do something about it. It's one thing to spot problems and complain about them, it's another to spot them and solve them. This guy is no better than the office drone who never complains, but also never does anything but wait for the next assignment, either.

As you hire, you will inevitably come across the follower disguised as a leader; sometimes, all it really takes is a little freedom and respect to bring out their full potential. But, just as with any other relationship, once that person regards you or your company with contempt, the situation is unfixable. A loss of respect on either side in the workplace is impossible to correct with anything other than a gentle parting of ways; the longer you wait, the more likely their malice is to spread to their lunch mates. But assuming you're actively weeding out the bad eggs and hiring with leadership qualities in mind, the next step is to create an office culture that can allow leaders to flourish.

It's up to you, the company founder and leader, to dispense with ego and make it part of the culture that no one individual or team is God, and that the voice of dissent needs to be acknowledged. Instill in your company leaders and in yourself the values of trust and respect, and remember you're hiring people who will have a major effect on the success of your company. Give them the room they need to make the best contributions of which they are capable -- it will develop a team of loyal, talented, fulfilled employees. Not every employee can be a leader, but make sure you don't have any LINOS -- Leaders In Name Only.

Free them up to experiment, to make mistakes, to find unconventional solutions to problems, to take risks, and reward them when they do. As an entrepreneur, you know the road to success is often paved with small failures and the skeletons of incomplete ideas. Surround yourself with individuals who will ultimately make your company stronger, not simply toe the line. Your investors are willing to bet on you, that your idea, talent, and work ethic will make for a successful company. They don't want to have to step in and run it themselves, they trust you to do that. You, in turn, need to be treating your employees like investments -- give them the freedom and the support, and you will see a great ROI.

Let me know how it goes.

Jen

P.S. I'll be reading the suddenly wildly popular Holacracy this month and I'll be back to report on it. I'm pretty sure I'll love it.

Invest In Your IRA and Your Ad Ops Team

Everyone spends time wondering about their financial future. To be human is to daydream about being wealthy, or be fearful of being poor.

Start up founders are looking to their financial future on a daily basis. Which product will be the most lucrative? How can we monetize this feature? What will my investors say when I report last quarter's financials? What do our revenue projections need to look like to keep my employees happy and excited? What's my runway and how can I extend it? They're constantly thinking of the bottom line and of ways to increase it.

Especially during a funding round. 

Why then, isn't every start up investing in their advertising operations team?

Let's be honest. The collective wet dream of tech-savvy millennials everywhere is to have a sticky product with a subscription-model business plan. Netflix, Birchbox, the toilet paper industry, they all have it made in the shade. But not every content site can rely on users to regularly pay for access. The truth is that quite a few subscription-based services also have free, ad-supported services, and for a lot of sites, ad revenue is key to survival. 

When you begin your ad revenue-supported company you are going to invest in two very key components: great content and a platform on which to share it. For a long time, this will be your focus. Once you've gained enough traction to get a good number of viewers on your content, your next natural step will be to focus on monetization. So you go out, and find yourself an ad operations hire, and the money starts growing.

Great! Wonderful! You have a surplus, and your development and content teams have been running on Red Bull and promises for so long. They need new hires! Better tools! It's only natural that the surplus goes to growing those teams and filling other needs. And in six months, your content team has tripled in size and you're producing quality, interesting content at a 500% faster pace, and your development team has made the site responsive and decreased load times. With your increased visitor counts you are starting to attract some serious advertiser attention, and RFPs come pouring in. But after months of growth, your revenue suddenly plateaus, or even drops. What happened?

The one ad ops hire you brought on six, nine, twelve months ago is struggling. They're trying to handle all of this new work on their own, and their only tools are a free ad server and Google Docs.

For a year at Grooveshark, I was the only media planner, account coordinator, and trafficker for direct-sold campaigns. As our popularity exploded, I found myself handling fifteen RFPs a week, coordinating and trafficking thousands of dollars' worth of inventory each day, and working to maintain our relationships with agencies and representatives. I was working 12 hour days, ate lunch at my desk, and was barely keeping up. I was tired, and starting to make mistakes - mistakes that cost money - but there wasn't a budget for hiring in ad ops. I was ready to quit and take a nice, long winter's nap.

Behold the symptoms of ad ops burnout

Eventually the budget came along and I got to sleep more. But Grooveshark almost lost a loyal, hard-working, trained employee. In a startup environment, we all have to pitch in and work with what we've got to an extent, but don't make the mistake of rewarding other teams with hires and tools while thinking that since ad ops is newer, they can bootstrap for longer. You're just putting limitations on your revenue.

Let's approach this logically. If you've done your job well and hired the right ad ops professional for your company, they're going to naturally want to optimize for their job. And optimization equals less expenditure, more income. They're already in the mindset to get you more bang for your buck, so when they come to you and say "I need to hire," or "I need this tool," it means they need it to be able to get you more money. If they're spending all of their time and energy maintaining revenue, they don't have anything left with which to brainstorm and experiment on new revenue streams, or ways to cut costs. So by denying them help, you're denying revenue potential.

And that's just dumb.

Let me say it point blank: if you're an ad revenue-supported service, your ad revenue has to be your top priority. This is your income, the way you pay your employees, the thing that allows you to innovate, and what attracts investment and buyouts.

Think of investing in your ad ops team like you would invest in your own personal financial future. Short-term gain in the form of additional developers for flashy new features or a social media guru for Pinterest exposure both sound really awesome. But you have to do the necessary. You can't retire on short term gains. You retire by investing in something that gives you compounding interest with growth over time. And that's the ad ops team.

Make good choices,

Jen

One Fish, Two Fish

Quite possibly the most frustrating thing about working in ad operations occurs when it comes time to build out a team.

Unless you live in New York or San Francisco, you're going to find that there's a serious lack of experienced ad ops professionals. Most folks don't even know what ad operations is, let alone how to operate an ad server.

Can I list Microsoft Word as a skill?

As a small business owner, your time is much too precious for you to be spending hours in DFP each day trying to determine why your campaign progress is so low. For you, the days are too short, you can never get enough done. You don't want to waste weeks searching for an ad ops professional you can't afford, nor do you want to end up hiring a noob who doesn't know what an impression is.

Living and working at a large publisher in a college town for five years, I frequently found that I didn't have a choice. Nobody from NY or SF wanted to move to my town, so by default I was looking to hire people who had no ad ops experience and likely no relevant work experience at all. During the time I was there, I had to build out an ad ops team from scratch roughly three separate times, and I'm here to tell you it can be done.

Let's assume you're building a team from scratch, as well. After setting a budget, the very first thing you need to do is determine what kind of person you want working for you. What values are important to your company? What's the culture like? Who will best fit in? If you hire someone smart and resourceful but their personality is such that they won't get along with the rest of your team, they might work out for a little while but the odds are they will ultimately feel like an outsider and leave for another job. Don't fall into this trap and hire the wrong fit for your company culture - how your employees feel about each other is one thing you simply can't control, but you want to try to set them up for success.

The next thing to consider is what kind of skills they need to have. Obviously ad operations experience is a major plus, but you may not get so lucky. What work experience and interests would likely make for a great ad ops hire, you ask?

COMFORTABLE WITH NUMBERS

They will be working with numbers all day, every day. Manipulating them, experimenting with them, recording them, reporting on them. If they aren't comfortable with algebra-level mathematics, you're gonna have a bad time.

DETAIL-ORIENTED, WITH LOGIC AND PROBLEM-SOLVING SKILLS

Keeping campaigns on track means looking at them every. Single. Day. Spotting the little inconsistencies. Remembering to insert pixels where they need to be inserted. They will perform the same tasks hundreds of times and if they don't pay attention to the little things, you can bet something will go wrong. And no matter how diligent they are, the day will come when something's broken. When your revenue chain has a broken link, it's of the utmost importance that it gets repaired. They have to be able to track a problem down to the source and then resolve it quickly.

SELF-STARTERS

The ad space is always changing. Every day, new buzzwords are invented for things advertisers decide they suddenly care desperately about. Your ad ops team will be the primary knowledge resource for your sales team, your advertising partners, and you. They need to know what's going on in the industry, and they need to get your company in the best position for attracting business.

That's it! If you can suss out their skills in an interview and they have all of these personality traits, you've got a real winner on your hands. Bonus points if they have a background in statistics, data analysis, or marketing. And since you've hired someone with little to no experience, you'll be able to pay them a lower starting salary. Likely they will also feel very grateful for the opportunity, and if you play your management cards right, you will have the loyalty of this individual for a long time. Don't underestimate the power that believing in someone can have on their love for you and your company. It will go a long, long way.

But what's next? As self-starter-y as they may be, you can't just give them a desk and expect them to make you money right away. Though there are many pluses of hiring a future rockstar, it does come with one pretty major pain point: you have to take the time to train them. Like any good manager, you understand that by taking the time out now, you will create a self-sufficient team that will consistently take your revenue to the next level.

If you don't have the time, or don't have the knowledge, consider hiring an ad ops professional to train them for you. Even the most basic knowledge can go a long way, and since you've hired cheaply, you can afford a one-time investment, right?

May your resumes be ever plentiful,

Jen