Build or Buy

It’s a debate as long as digital publishing has existed: should publishers build their own tech or buy it in from partners? And should they bring in and develop their own talent or outsource to external experts? We explored the arguments on both sides to help you navigate the various options out there should you choose to go down the buy route.

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Should publishers build in-house technology and hire talent or buy third party solutions and outsource?

By Martin Ashplant

The question of whether to build or buy technology solutions is one which has been prevalent in the publishing industry for some time, with different people advocating different approaches at different times.

Equally, the topic of whether a publisher should invest in building up its in-house technology expertise through hiring developers, designers and product people is one that is likely to have been discussed at almost every media owner at some point. And with the increasing cost and difficulty of retaining such talent, it can feel as though using third parties to provide those capabilities is the best – and often only – option.

But what are the wider implications of making a decision about whether to build or buy? What does this do to your business goals? What happens if you build something complicated and all the people who understand it go off and leave?

To try to answer these and many other questions, the PPA assembled a panel for its inaugural Decodes breakfast briefing on February 9th 2022 consisting of four people who have been at the heart of these sort of decisions for many years.

The decision as to whether you build or buy tech depends…

Publishers need to clearly establish what their goal is and what their audience needs are before they approach the decision as to whether they should build or buy. There was a time when the only option to get what you needed was to dive in and build something bespoke for your needs, but that is no longer the case and publishers should weigh up all the options through many different lenses.
“What we are seeing now is that you have this emergence of vertical SaaS platforms that are specifically aimed at an audience,” said Haman, who spent 25 years working in tech for media companies before joining Glide publishing platform.

“By all means build the team that's going to deliver your unique proposition and build up your product. But for me, especially in the age of very expensive tech talent, having to invest in a team that's going to reinvent the wheel to produce the same capabilities that you can get off the shelf for a fraction of the price seems a wrong direction.”
But if what the publisher is trying to build is genuinely core to what they are trying to achieve and they can’t get it elsewhere at a price or in a time frame that works, then doing it themselves makes sense.

“The thing that you need to look at is what is core to your business,” said Hayter, who at Stylist has been part of an in-house team that has built numerous tech products including a contextual advertising tool, a registration wall and a Customer Relationship Management (CRM) platform. “For us, it's our audience and our words and pictures. Those are the core areas of our business. Everything else is nice to have. Ultimately people come to us for words and pictures - and so we own those things. For us, it's also really important we own all of that customer data and we know who that person is and what they are doing. And we own the delivery of that content to them, both from the CMS and from a front end perspective as well. Because we don't want to be beholden to a third party.”

But sometimes a publisher simply can’t afford or isn’t able to build its own platform, which is where business news outlet City A.M. found itself when, in the midst of the Covid pandemic, they decided to replatform their website on the back of burgeoning digital demand and opted to work with a third party to get that done.

“We're not a CMS company, it's something we can outsource,” Keck, City A.M.’s Digital Director, said. “We're a small publisher and when it comes down to the numbers, it's a lot cheaper for us to outsource. And so far, it's been a really good experience for us.”
Dom Perkins, Managing Director, UK & Europe, at Sovrn, agrees with the need to make sure that the focus is on the right way to solve a specific business problem, advising publishers to remember that “1+1 can equal more than 2.”

“In other words, does the technology exceed and surpass the sum of the equal parts?” he said. “When we are brought into a publisher's technology mix, we add incremental benefits to the publisher - not least of which is allowing them to do more of what they love and less of what they don't, allowing them to scale and drive new ways of generating revenue.”

Tech people leaving the business can pose publishers a problem

It’s not just the initial building of a tech product which requires some careful thinking from publishers – they also need to consider how they will maintain what has been built, particularly when it requires specialist expertise. Relying too much on a group of internal tech people who may decide to pursue challenges elsewhere can lead to problems down the line. This was a key factor when City A.M. made the decision to outsource rather than build internally.

“We did have an in-house tech team before,” Keck said. “The problem we had was people left and we had trouble filling the roles. They took knowledge with them and it was just so difficult to keep people as we are not a technology company, we are a content company. We might have got the best journalists, but we might not have the best developers. And we just kept having issues until eventually the site just crumbled.”

During his time at Beano Studios, where the team turned a much-loved kids comic into a data and insights business based on a digital proposition for kids, Ravindran faced a similar predicament, although in his case the choice was to switch platform but keep an in-house development team.

“We started with a bespoke website build on Ruby on Rails but the last thing I did after three years there was migrate the site to WordPress, using an agency and WordPress VIP as the hosting provider,” Ravindran said.

“One of the driving forces in deciding to move to WordPress was that there was a massive pool of people who understood that CMS - so you knew you could find development resource readily.”

Most build or buy decisions are ultimately made by senior business people – but editorial teams need to be involved

Although the usual suspects when it comes to making these sort of decisions at a publisher are the finance, product & technology and senior business stakeholders, it’s crucial that the editorial team are involved in some way. Particularly if the end result is a product they will be using every day.

“Editorial absolutely need to be at the table,” Keck said. “The website is the core of our business so, ultimately, they need to be able to use this platform, understand it and understand the benefits of it. So we need to get them excited about using it.”

Haman added that in his experience who is at the forefront of those decisions depends heavily on who is driving change in those companies. “It really depends on the shape of the company,” he said.

“In some companies editorial has a much stronger voice than in others. In companies where editorial has a really strong voice, and a strong editor, they're very much at the table as to that selection process. But in other companies, we may not even see them.”

“We advise for editorial to absolutely buy into the decision. But in some places other people say they are the ones working out what the editorial team should have - which is a really bad idea, by the way.”

There is no easy solution to the challenges of hiring and retaining good tech talent but ensuring your business values aligns with theirs is key

Publishers will be all too aware that the technology talent market has never been hotter than it is right now. We are at a point in time where it's really hard and really expensive for publishers to acquire and retain technology talent – not least because they are competing for the same people with well-funded financial services and the latest cool start-up who can sweeten their offers with equity. So how should publishers seek to navigate such a challenging market?

“In terms of hiring and retaining people, I think you need to make the job interesting for people,” said Ravindran, who as CIO at the New Statesman Media Group oversees in-house tech teams working in the UK, Bulgaria and India.

“You need to make sure they are challenged, make sure you're working in modern agile fashions, and make sure that their values are reflected in the company's values. Easy to say but hard to do. But it's those things that really matter with talent: aligning of their values and the company's values and making sure that the purpose is there.”

But there’s no escaping the fact that talented technical people can command huge salaries. It’s a point underlined by Amazon’s decision this month to increase its cap on salaries from $160,000 to $350,000 because of the competition in the employment market. And it is not only software development where this trend is being seen – and felt in the pocket by publishers.

“It's everything that goes around development teams,” Hayter added. “The cost of a product manager has almost doubled in the last 12 months. It's insane. And for good UX and UI designers, it’s exactly the same.”

And it is these huge costs associated with hiring in the people you need to build tech platforms which is an unavoidable factor when publishers are deciding whether to build or buy, particularly for smaller companies.

“What we were able to do through outsourcing it to an agency is get access to world class talent, really amazing talent, as well as to innovation and broader market thinking. We couldn’t have done this on our own,” Keck said.
Even tech solutions providers themselves are not immune to the high cost of hiring in talent, with Sovrn’s Perkins revealing that they will also sometimes need to work with partners to deliver what is required.

“As a publishing technology provider, our goal is to provide the best solutions that allow our customers to better understand, operate, and grow in a complex industry,” Perkins said.

“So we look to hire the best-in-class talent, located in each territory to address each market’s strategic requirements. However, we're also realistic and understand that in some cases in order to deliver best-in-class products, support and technology we bring in partners who specialise in those areas.”

For more from the PPA Decodes Build or Buy panel watch some of the highlights in the video above.