Media Sellers - Extinction Level Event

An extinction event [also known as: mass extinction, extinction-level event, or biotic crisis] is a widespread and rapid decrease in the amount of life on earth. Wikipedia

                                                                                                        

The post title might be a touch dramatic and I'm certainly not talking about any loss of life - however the term Extinction Level Event to me best describes what's on the horizon. This blog post was written in my mind months ago but as soon as I read the AdExchanger.com article, titled "2013 Will Bring A Talent Correction in Digital Media Sales" by Adam Chandler, I knew I had to finally write this post.

Adam is dead on when he says there is a major talent correction coming to the digital media space. They day of the order taker is near its end. And having been on the client side now for nearly a year I can honestly say that the overall quality of media sellers out there is abysmal at best. Are all media sales professionals bad? No not at all but as someone who was on the receiving end of 100's of emails, many many phone calls and even as a client, I was truly shocked at the overall quality of sales people in the digital media space today. Here's one of my favorite stories:

Me: Listen [Media Salesperson], I'm not hitting my CPA goals with my media buys. I cannot afford to not hit them, so at the moment I can't buy anything from you unless your pricing changes the overall economics.

Seller: OK, what is your CPA target?

Me: We need to be at $1 to make this work.

Seller: OK, well if CPM pricing isn't working then maybe we can do a small CPC test. What if I could get you a $1 CPC?

And that folks is a VERY true story. And as I speak this person is a VP of Sales at a rather well known Media Co....And the very sad truth is there are so many more stories just like that one.

In one of my latest gig's @ Zeta Interactive I got to witness not only the birth of a brand new digital agency but the process in which we all went from single solution sellers (whatever our background was email, search etc..) to integrated sales professionals. Selling both marketing services and marketing technology. It took us all about 3 years to really hit our stride. The learning curve was steep but the more time you spent with SME's from various disciplines the better you got at understanding each one. And the better you understood each channel the better you understood how to create compelling innovative solutions for clients. Because at the end of the day clients want solutions that drive ROI/Revenue/Results - they care far less about how you get there. 

So why the mention of Zeta Interactive and my history there. Because right now, there are a ton of talented sales professionals on the marketing services/agency side that understand the entire digital ecosystem and can bring a ton of value to both the companies they sell for as well as the companies they sell to. The dramatic rise of programmatic buying will allow media companies to shed a large portion of their existing sales forces, as a large % of their inventory will be purchased via algorithmic trading. And my prediction is, as media firms look for sales people to lead large integrated sales, they will look outside of the media world and look for salespeople who have experience with complex digital sales and a firm command of the entire digital ecosystem.

The war for talent only gets worse...

Why it's a great time to be a Publisher

There's no doubt that the Publishing business is challenged right now. Print advertising continues to collapse with total ad pages falling 8.2% from last year, according to the Publishers Information Bureau and the audience migration to mobile devices continue to eat away at website monetization. Throw in the lack of scale and ad revenue within tablet publications and you have a VERY tough path to navigate.

So then why the heck is it a good time to be a Publisher? For a few reasons...

1. The Rise of Programmatic Buying:

What? Sounds counter intuitive right - RTB, DSP's yadda yadda yadda...are actually hurting Publisher pricing, right? Perhaps for the moment this is true but over the long term programmatic buying of audiences should be a boon for Publishers. Why? Simple...There is a TON of dead weight in each an every Publishers Sales Dept. You know exactly who I'm talking about - they're called "Banner Slingers" or "Order Takers" and they have benefited greatly from their T/E accounts and ability to send IO's to agencies/buyers that ask for it. Programmatic buying will eventually weed these folks out and leave only the top sales talent or create a new wave of sales talent that the Publishing industry has needed for a LONG time. Solution Sellers - these are people that understand the entire digital ecosystem and work with their clients in a consultative manner to drive ROI...not just sell more banners, rather, integrated offerings and campaigns that leverage all of the publishers assets, data and touch points with the consumer. And hopefully this has the same effect on the buy side of the equation with Agencies - who are guilty as ever of being lazy.

Eventually Publishers may even be able to focus in on, in real time, high value audience segments and adjust their content strategy to drive audience based on real time pricing data. A similar approach to how Demand Media and The Huffington Post leveraged Google search data to drive traffic. And while contextually relevant advertising is not always scalable for large brand ad buys - the quality of the relationship created between the reader and the Publisher will create value, with higher bids going to the better engaged audiences.

2. Content Marketing:

According to a recent AdAge survey marketers said that on average 12% of their budgets would be spent on Content Marketing initiatives. This represents $40B in annual spend according to a study by the Custom Content Council and ContentWise. Wow a $40B and growing market - how do I get in?

Well this is great news is if you're a publisher, you're already there. Publishers offering marketing services is nothing new, this convergence has been slowly happening for years. However internet technology companies such as Google, Facebook and Twitter are accelerating this process dramatically. Google and Facebook both place a huge premium on unique, original content. If you can appease them - then the algorithm Gods will bless you with loads of traffic. Brands are now waking up to this fact as well as the fact that, it is content that drives audience and builds relationships with consumers, not pushing out a new discount code every other day.

Advertisers pay for the right to be in front of the audiences that Publishers have aggregated...so doesn't it make sense that the Publisher, the one who has built this relationship, is in a better position to help the advertiser with marketing services vs. an agency? But for Publishers to truly get in the game they need to deeply integrate these marketing services into their overall sales process and value prop to the advertiser. From what I've seen a lot of the marketing services acquisitions done by Publishers in recent years have not been fully integrated or integrated at all. Long story short - there is plenty of opportunity here.

3. The Tablet:

Steve Jobs said that the iPad was a "magical device" and he was dead on. The tablet was a game changing innovation and tablet sales are accelerating faster than anyone could have every predicted. The iPad is the fastest selling device ever for Apple.

2012 Internet Trends. Chart courtesy of Kleiner Perkins Caufield & Byers.

Not only are tablet sales going gang busters but people are using their tablets to consume even more content. The tablet, as it turns out is the perfect content consumption device as evidenced by research performed by Morgan Stanley:

Source: Morgan Stanley Research

The iPad also represents as chance for publishers to finally bring some of beauty of print ads to the web. The full page ad never really made sense for the desktop and probably not for smartphones either. But the tablet changed the game by allowing advertisers the ability to create beautiful full page ads with all the features and interactivity the web has to offer. Which is why IDC Research predicts that tablet advertising spend will out pace mobile within 3 years.

IDC, Worldwide New Media Market Model, NMMM 1H-2012.

Publishers need to aggressively invest into the tablet market in order to start reaping the benefits as print ad revenues continue their decline.

The future is a bright one if publishers can navigate today's landscape and make the right investments for growth tomorrow.