Advertising Guest Columns
3 mins read

Forget FOLO: Economic theory explains why vendors will take you back

We’ve all had some version of this nightmare.

After years with the same dry cleaner or auto mechanic, we finally get the nerve to try a new vendor.

And as we’re walking to our car with our dry-cleaning in hand or pulling out of the new mechanic’s parking lot, who do we run into? The old dry cleaner or auto mechanic.

The fear is that if we test or switch vendors, we’ll get found out and the old vendor will never take us back. Ever.

As an ad tech vendor, I hear the same story from publishers. It goes something like this:

1.       The market-leading vendors will abandon us today

The first concern publishers express about testing a new vendor is that their existing vendors will feel betrayed and abandon them immediately. But the reality is that 98% of the time, they don’t. The reason is very simple: Abandoning a publisher means having to find a new one to replace the lost revenue. And as every customer success manager will tell you, it’s easier to retain an existing customer than to gain a new one.

Of course, testing a new vendor doesn’t mean you are leaving your current vendor.

Realistically, incumbent vendors are more likely to raise their game than they are to abandon a client once they know that the client has been looking into alternatives.

2.       I can’t make enough money without the market leaders

Another frequently raised concern from publishers is that they will not be able to generate enough revenue without working with the market leaders. Again, economic theory answers this question. Advertisers seek out opportunities to market their products on appropriate publishers’ sites. Like a kid in a toy store, advertisers will always find their desired publisher opportunities regardless of which vendor is selected. As long as publishers generate or aggregate quality content, advertisers will find them.

3.       The market leaders won’t work with us in the future

Another concern publishers raise when being pitched by a new vendor is if they decide to return to the market-leading vendor in a year or two, that vendor won’t take the publisher back. But ex-vendors are usually happy to welcome back former publishers, even if there was another vendor in the middle.

Why? First of all, working with different vendors isn’t cheating. It’s part of doing business. Second, and perhaps more important, winning back a lost publisher is often bigger than winning the business the first time. And because the vendor has a history with the former publisher, if they want to come back, they do so with an understanding of what they’re getting into and what they’ll gain – a positive for everyone.

At the end of the day, it’s business. It’s about making more money.

Most important, regardless of what anyone tells you, it’s not personal.

So to all of the publishers who fear that they’ll lose revenue or major advertisers by not working exclusively with a market-leading vendor – or just testing a new one – economic theory has you covered.

Publishers shouldn’t be afraid to mix things up. Shaking up partnerships can be a good thing for all parties involved. It keeps publishers up-to-date and vendors on their toes, which translates into progress for everyone. 

Alon Rosenthal 
CEO, WhizzCo

WhizzCo is transforming the native content recommendation space into a transparent, fair, and competitive ecosystem. By opening publisher inventory to multiple, competing vendors, WhizzCo empowers publishers to harness the best each has to offer with just one integration, thus raising content recommendation revenue by 37%. The company’s proprietary algorithm, a machine learning neural network, predicts the CPM from the 40 content recommendation vendors worldwide, considering geolocation, device, site, widget location, and more, and then serves the ad with the highest predicted CPM.