The Myth of Proprietary Marketing Technology

Proprietary technology is great for Shark Tank, but it’s rarely what’s best for marketing services firms and their clients.

In the marketing space, proprietary tech often takes form as unique reporting platforms, bid management technology, or homegrown data management platforms. Mostly, marketers use these platforms to collect and analyze data and execute digital marketing strategies for their clients.

While these can be technically impressive, custom designed platforms often end up limiting both the agency and the client. 

When we talk to clients, their first priority is always how we will get them the best digital marketing results possible.

We often get questions about what platforms and marketing technologies make up our “tech stack” – the applications, platforms, and tools we use to manage a client’s campaigns.

Questions often gravitate toward whether we use any proprietary solutions unique to our agency.

At BFO, we don’t see any value to a client in proprietary tech. As such, we don’t develop, build, or manage proprietary marketing technology tools. In fact, we see it as a drawback.

This article explores many of these risks and where proprietary technology fits into the equation when choosing a marketing services firm.

Why We Don’t Use Proprietary Marketing Technology

Our clients hire us to put them “in the right places and in front of the right faces,” as we like to say.

To do this, we spend our time on data analysis, applying insight, building strategies, and leveraging the best-in-class tools available in the marketplace. We spend zero time developing tools.

Instead, we partner with software innovators who specialize in various marketing platforms. This puts software updates, database modifications, and other software maintenance challenges created by platforms on them.

Using top-of-market tools allows us to specialize in our expertise, being digital marketing professionals focused entirely on our client’s goals.

For example, some search technology platforms cater to the unique needs of e-commerce companies and have features that B2B marketers and lead generation campaigns don’t need.

By using a third-party platform, such as the Google Marketing Platform, we can choose the best platform based on clients' needs.

It also enables us to guarantee data continuity for our clients. If a client should choose to leave, their data resides in a third-party system and belongs to them. There’s no question about getting their data out of our unique system, no questions about who owns the data, compatibility of the data with a new platform, or the costs associated with purchasing the data, not to mention fees for extraction of the data, download, and delivery.

On the flip side, if a client coming onboard with us has their data in a common third-party system, it’s a straightforward transition. This saves the client time and money.

6 Drawbacks of Proprietary Technology

A marketing services company's primary objective for its clients is its ability to strategize and execute its marketing campaigns.

However, when a services firm owns a proprietary technology, supporting its technology often becomes the top priority.

This makes sense. Firms that use proprietary technologies rely on that technology to produce their client deliverables. This means they must keep it updated and bug-free.

Efforts like this demand resources focused on technology rather than on innovating ways to enhance marketing results.

Other challenges a client might face with services firms that use proprietary tech:

1. Quality: Quite simply, a firm that does marketing and makes and supports a tech must balance its resources between the two, rather than dedicating all resources to one specific competency. This also often means the tech does not offer as many features and integrations as other more-established applications made by a dedicated tech company. For example, Google has built abundant features and APIs into Adwords; a firm with a proprietary technology simply can’t offer as much.
2. Data Ownership: If the client decides to move to another agency, the data might not be able to move with them if it lives within an agency’s proprietary stack. For example, we took over a client who used a marketing firm’s proprietary paid search platform. When they left, they had to leave their conversion and attribution data. They had to basically start from scratch with their data.
3. Expertise: Managing, producing updates, and keeping an updated proprietary platform takes a lot of time, particularly as the digital marketing landscape continues to change. This divides a firm’s attention and expertise. A giant firm might be able to handle these demands with a large staff, but it might be difficult for smaller ones.
4. Applicability: There are a lot of marketing technologies, all designed to meet the demands of specific clients' needs. Technology should solve a problem and empower a brilliant marketing campaign execution. However, if a firm has proprietary tech, it is limited in what it can do, or alternatively, they must promote it as a viable solution for a broader set of issues than it’s actually designed for.
5. Agency Focus: Agencies should focus on filling needs like personalization or making real-time bidding decisions, rather than justifying their technology.
6. Updates: The online world changes fast. A firm may focus on speed to market or how fast they can roll-out new features in an effort to keep up. If there are “bugs,” the client suffers.

These represent a few of the major drawbacks. The reality is with so many scalable tech platforms out there provided by legitimate software development companies, why would anyone want to work with a homegrown piece of technology?

After all, do you really think a 20-person marketing agency can outsmart Google or The Trade Desk?

Questions to Ask a Prospective Agency About Their Proprietary Technology

If your prospective agency offers or requires that its clients use its proprietary technology, treat your evaluation of that agency as if you’re interviewing 2 companies: a marketing agency and a tech firm.

Here are some questions to ask about the technology:

• What percentage of your revenue comes from your tech platform? If most of their revenue comes from their tech, they’re not invested enough in marketing.
• What percent of your staff is focused on your platform?
• Is the development team in-house or outsourced?
• What percentage of the work is done in-house?
• Where do you outsource to and describe the relationship?
• How often is it updated? Can you share a release schedule from the past 2 years? This is critical to understand if the tool will keep up with the times.
• What competitive tools in the marketplace have you evaluated? This tells you if they are only focused on their own tools or if they are aware of the market trends and updates. 
• What are the downsides of using your technology platform? This is a blunt and honest question that will teach you a lot about a potential agency partner.
• Is the data that I input portable? What happens to our data if the partnership ends? Your marketing data is vital, guarantee that you own it!
• Is it 100% built in-house? (An agency may white label other platforms and call them “homegrown.”) Sometimes, an agency may put their name on a third-party platform. As a client, however, you deserve to know that the agency hasn’t actually developed their own tech - for all the potential problems listed above!

Consider Whether An Agency's Proprietary Tech is Useful

As a client, it’s important to remember that you hire a marketing services firm for marketing. The tech used by your agency of choice should enable your marketing efforts and results rather than define the campaigns you will or can run.

Some talented agencies have built great tools after recognizing a need and no current market solutions. But, those instances are exceptions.

Ultimately, every technology you and your marketing firm use should improve your ability to reach your business goals.

About the Author

Dan Golden is a veteran digital marketing executive, entrepreneur, and business innovator. As president of digital ad agency Be Found Online, he has built a business model on employee empowerment and giving back to the community. These strategies earned BFO recognition as AdAge’s #1 Best Place to Work 2016, a 6th straight year as one of Inc. 5,000’s Fastest Growing Companies and continued agency success as a finalist for three US Search Awards. In 2015, BFO expanded internationally opening a 20-person office in London followed in late 2016 with an office in Singapore.