Ad Sales Blog

Nine years from now what will break the desk?

Nine years ago I was working for a print trade magazine so full of ads that when we put the issues we had in our trade show booth reception desk, the weight of them broke it. Those magazines were packed with ads. Today, trade show reception desks are largely safe from this danger. Two questions:

First, what does it take to break the desk today?

Second, considering how much has changed since I took these pictures, what will things be like    nine years from now?

Your thoughts?

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PS, I took these pictures of issues of Broadcast Engineering magazine at the 2003 National Association of Broadcasters show.  

For publishers, digital dollars are about data not eyeballs

 Are you swapping analogue dollars for digital dimes? 

If you follow the traditional publishing business model in an ever more the digital world it is inevitable. The traditional magazine business model is based on creating content to attract eyeballs, and then to sell exposure (advertising) to them. This basic plan has kept magazine publishers profitable for over a hundred years. But this model faces harsh challenges in today's digital media world.  The problem is a far more efficient way to deliver eyeballs online, called "search." Every marketer knows that they can get far more eyeballs and clicks per dollar for their website buying “search” instead of digital media from traditional publishers. Why every publisher does not know this is a mystery to me. 
 
To understand the problem let's look a look at a rough example with the math:

Say you publish a magazine that charges $6,000 for a page of print advertising which gets $1,000 for a banner on it's website. What if running either a print or newsletter ad gains exposure to many eyeballs and results in 75 click thoughs to an advertiser’s website. Depending on the expense of appropriate keywords, a click through generated by Google, or another search engine, could cost as little as 20 cents or as much as $5. So, Google would charge between $15 to $375 for the same number of clicks you are asking advertisers to pay $1,000 or $5,000 for. Argue all you want about the quality of your clicks. With this big of a price difference it is going to be hard to make it stick. 
 
If you don’t think the online advertisers in your niche are impressed by this math,

IAB online ad revenue for 2011 shows the continued growth of search

think again. According to Interactive Advertising Bureau (IAB) almost half of all online ad dollars (46.5%) now go to search. A recent analysis of where Google gets its ad dollars shows penetration into niches traditionally held by publishers.       
 
 
 But there is a better way to compete. The core strength of digital media is not in its ability to deliver exposure to eyeballs, but in its ability to deliver interactive experiences. Why sell one way communication (eyeballs) for what is a fundamentally an interactive medium? With this in mind, a new model for publishers is emerging:
 
Use content to build data on potential customers. Use that data to build sponsorable interactive customer experiences.
 
In this contenxt, a piece of data is either the location of an individual (address, phone number, name, company name, e-mail address, zip code, etc.) or information about the individual that explains his or her behavior (buying intentions, current products owned, income, demographics, sex, ethnicity, political orientation, type of car owned, etc.).   
 
What can you do with this kind of data? Let’s look at a that rough magazine example where they are charging $5,000 for print ads and $1,000 for web banners. With the right data, what else could they  sell?          
 
Create targeted sponsored webinars.
Cost of sponsorship $7,500 to $15,000
 
Create live sponsored events. Cost
of live event sponsorships, $5,000 to $15,000
 
Create market research to sell.
Cost of market research, $2,000 to $15,000
 
Create market consulting opportunities.
$7,000 and up
 
Create highly focused direct
marketing based on opt in lists (e-blasts) $2,000 to $4,000
 
These are not digital dimes.

 

Download my white paper on how publishers can profit in a multi-screen world sponsored by Sheridan Press 

 

Dedicated digital media reps versus all reps sell digital: the numbers are in

Should you hire dedicated digital media salespeople or train your legacy reps to sell new online media? At least for local media, Gordon Borrell, President of Borrell Associates, has the data and the answers. His organization maintains a database that measures how well 5,200 local media companies are progressing with their digital revenue.

When he surveyed these organizations on the make up of their sales force and thier performance he discovered the following: 

• There are about 80,500 media sales reps selling local media (local radio, TV, yellow pages, newspapers etc.).
• About 51,000 of them are "digital ready", meaning they are expected to sell some amount of digital advertising.  

Here's the kicker:

• Organizations with dedicated digital reps average 2.5x more digital revenue than those who have their traditional reps selling digital. 

Another interesting finding was that the percent of reps who are "digital ready" varied significantly by industry:

• Newspapers: 85% digital ready
• TV: 50-60% digital ready
• Radio: 15% digital ready

That is not a typo, for radio, 15%.

All this is reported in a video created by media consultant Mark Ramsey, President of Mark Ramsey Media, in which he interviews Borrell.

If you want to hear both Ramsey and Borrell speculate on the near comical failure of radio to capitalize on digital media, play the video. If you have anything to do with radio, it's a real eye opener.      

 

Profit on the web is about audience not traffic

At the recent Digital Magazine Symposium, Gordon Borell astonished the audience by blowing up the notion that building that largest base of online readers is the key to ad revenue. 

   After surveying the financial results from thousands of local media Web operations for the past eight years Borrell concludes there is no direct correlation between large amounts of traffic and large amounts of money.

For example, Borrell tracked a wedding Web site in one of the top media ten media markets making nearly as much money in Internet advertising (in millions of dollars) as the #1 ranked TV station website in that market. The TV site gets about 600,000 unique visitors per month, the wedding site gets about 60,000, or 1/10th of that traffic. How can this happen?

Borrell says that online, the best advertising is content. There was a time before the Internet (my kids are shocked at this statement) when the top way consumers learned about products was through advertising. But the Internet has become a far more efficient educator. Many of the most profitable websites make money because their content functions like advertising did years ago, as a customer educator for product sales. According to Borrell, visitors of these sites are “leaning forward” to read the content while probably ignoring the banner ads. 

Some print publishers are still trying to win the print circulation/CPM battles online. But that battle is over. They lost. Online, search, which now accounts for over half of all online advertising dollars spent, has won. A media buyer can always buy more clicks per dollar buying search. 

While the online CPM battle is lost, the war for publisher profit can be won. Borrell shows us how with an example: “Compare radio, a $15 billion media segment, with the yellow pages, a $9.8 billion segment. About twice as many people listen to radio compared with those who use the printed yellow pages. So those ad dollars seem just a little out of whack, right?  Now consider this:  For radio, average weekly time spent listening is about 20 hours.  For the yellow pages, it’s about a minute.  An industry that reaches less than half the audience of radio and gets about 60 seconds of quality time with them every week – compared with radio’s 20 hours a week – can still attract about 65% of the ad dollars as radio?  That’s because the yellow pages, like the Internet, are a lean-forward medium where people see the advertising because the advertising is the content."

At the Digital Magazine Symposium, when Borrell laid this out, everyone in the audience was taking furious notes.

To further support Borrell's points, the chart below illustrates the dollar value of a unique visitor at some of the best known websites. To estimate these numbers, Silicon Alley Insider took the full year revenue for 2009 for each of the companies below and divided them by the number of their average monthly worldwide unique visitors.

As per Borrell, the more "wallet ready" the unique visitor is, the more dollars generated. Search gets the most per visitor, then display, and then social. 

Google's uniques (search) are the most valuable: $18 of revenue per monthly unique per year. Facebook's uniques, meanwhile (social networking) are worth a paltry $3.50. Twitter's uniques are worth almost nothing.

Understanding this, publishers, even small ones, can compete. For example, check out HD Camera Guide which attracts  a relatively small but valuable "wallet ready" audience.

The thing about overlap...McDonalds takes its shot at Starbucks

When you sell media there is always overlap. Your magazine readers read other magazines, your website visitors visit other websites, etc.

But overlap can also be used to strategic advantage if you come up with a plan to pull traffic away from competitors. That is what McDonalds did to Starbucks in May of this year with a special promotion designed pull overlap business their way.

According to Experian Simmons who tracked the results of the program, "For some time, the percentage of McDonald’s customers who also visited Starbucks trended steadily at around 17 percent. This trend quickly changed upon the launch of the McDonald’s McCafe coffee line in May of 2009. In one week, the percentage of McDonald’s customers also visiting Starbucks dropped below 15 percent and remained below 15 percent for about 9 weeks."

Think about your competitors that overlap and consider what content you could deploy that could bring them over to your side.  

White papers most influential collateral for tech buyers

According to the “Eccolo Media 2009 B2B Technology Collateral Survey Report,” white papers are the most influential form of collateral for tech buyers. Eccolo surveyed the use of B2B technology collateral during tech purchases. When compared to other collateral, white papers came out on top. 

Tech buyers found "most influential": white papers 38%, brochures 28%, case studies 22%, videos 9%, podcast 3%:   

The study also offered useful information on how to make white papers more influential: 

"When asked to rank which factors would most likely increase
the influence of a white paper, respondents most
frequently responded that providing detailed technical
information would increase influence, closely followed by real-life use cases and new industry developments. Likewise, we asked respondents to rank those factors that would decrease the influence of white papers. Respondents most frequently indicated that poorly presented information would decrease a white paper’s influence, closely followed by too much focus on a product or vendor, and no inclusion of real-life case studies."

Download the study for free (reg required).

 

To catch a blogger...

Bloggers have more influence on the web than ever. Many see their influence being as great as paid advertising. But can bloggers be influenced? Last year's Technorati: State of the Blogosphere study shows us the way. When bloggers were asked what content or advertising moves them:

The biggest influence on bloggers is, by far,other bloggers. To catch a blogger's attention, you or your organization need to launch a credible blogor find credible presence on the blogosphere itself. This is good news for content publishers who can create targeted blogs that sponsors may want to support.  

Read the entire Technorati study  

How print ads help generate web leads

Let’s talk about yellow page advertising. Here’s a form of advertising designed to elicit a response. Telmetrics, an advertising call tracking company released data earlier this month demonstrating the power of a unique URL as part of a print ad.

Telmetrics measured how many solid sales leads came from yellow page ads and compared how many came from a reader picking up the phone, versus reading a URL on the ad and responding online. 

Company president Bill Dinan made the assumption that most survey respondents would say they picked up the phone to engage the advertiser. He was correct, but surprised at how close it was when only 56% of leads came in via phone calls, and 44% came through a direct response of the URL printed on the ad. The study also discovered that unique URLs like  CallFlorists2.com were more often visited than client specific domains with URL extensions like Publisher.com/florists. If you want your print ad to generate a response keep the URL in the ad and keep it unique and simple.

Read the Telmetrics report

Sell more media by putting a price on brand equity

For media salespeople who struggle with the challenge of proving the dollar value of a branding campaign this study is a blessing. Millward Brown Optimor, the study creator, does the hard work for us as it examines the "brand value" of the worlds top 100 brands and ranks them.

According to this study, "Brand Value" is the financial value of a brand, "defined as the sum of all earnings that a brand is expected to generate." By isolating revenues only associated with a company brand, true brand value is laid bare. The study is also fun. These are companies we all know and it turns the potentially dull business of ranking brand equity into a horse race. Over previous the year brand equity at Home Depot is down 16%, Pepsi is up 15%, Starbucks down 25%, and BlackBerry up 390%. Goooo Blackberry!!

On a call.

 You can use this study to make a hard connection between brand building and revenue generation. You do not need to go into every detail of the study, use the study to sell the idea that brand value is revenue value. Find a page or two from the study where the well known companies are known to your client. Now turn that same line of thought to your clients business.

Ask: How much is your brand worth? What if it were worth more? How much more revenue would come in if it were? How could this happen? The answers to these questions could help you selling a branding program.

Download the FREE 2008 30 page report: http://www.brandz.com/upload/BrandZ-2008-RankingReport.pdf

 If one of your clients is actually in the report, you can have fun on the call by comparing 2008 results to 2007 report.

Download the FREE 2007 28 page report: http://www.millwardbrown.com/Sites/Optimor/Media/Pdfs/en/BrandZ/BrandZ-2007-RankingReport.pdf

Magazines: most credible source of "information about a company"

My 7/8 post reviewed a 2008  Edelman Study that documented how young Americans rated Business magazines as #1 in credibility as a source of company information, and Wikepedia #2.

But as Gregory Kohs correctly commented, the Edelman study is not focused on young Americans, it is a world wide study focusing on business leaders.

While the "young American" finding was interesting, the more important finding is how business leaders, world wide, perceive different media.

Posted here is chart on media credibility as it relates to this broader audience. 

As with young Americans, business magazines were #1 followed by stock or industry analyst reports, then followed by Television.

This is a great report to bring on a call to document the credibility magazine advertising can bring to a marketing program.

Download the entire Edelman study