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