Best Practices in Digital Display Media (Interview)

Digital display is remarkably complex. Standard campaigns can involve multiple vendors of different technologies and types of media.

Today, eConsultancy launches Best Practices in Digital Display Advertising, a comprehensive look at how to efficiently manage online advertising. We asked the author, Chris O’Hara, about the report and work that went into it.

Why did you write Best Practices in Digital Display Media?

In my last job, a good part of my assignment was traveling around the country visiting with about 500 regional advertising agencies and marketers, large and small, over three years. I was selling ad technology. Most advertisers seemed extremely engaged and interested to find out about new tools and technology that could help them bring efficiency to their business and, more importantly, results to their clients. The problem was that they didn’t have time to evaluate the 250+ vendors in the space, and certainly didn’t have the resources (financial or time) to really evaluate their options and get a sense of what’s working and what isn’t.

First and foremost, I wanted the report to be a good, comprehensive primer to what’s out there for digital marketers including digital ad agencies. That way, someone looking at engaging with data vendors, say, could get an idea of whether they needed one big relationship (with an aggregator), no data relationships, or needed very specific deals with key data providers. The guide can help set the basis for those evaluations. Marketers have been basically forced to license their own “technology stack” to be proficient at buying banner ads. I hope the Guide will be a map through that process.

What was the methodology you used to put it together?

I essentially looked at the digital display ecosystem through the lens of a marketer trying to take a campaign from initial concept through to billing, and making sure I covered the keys parts of the workflow chain. What technologies do you employ to find the right media, to buy it, and ultimately to measure it? Are all of these technologies leading to the promised land of efficiency and performance? Will they eventually? I used those questions as the basis of my approach, and leveraged the many vendor relationships and available data to try and answer some of those questions.

What’s the biggest thing to take away from the report?

I think the one thing that really runs through the entire report is the importance of data. I think the World Economic Forum originally said the “data is the new oil” [actually, the earliest citation we can find is from Michael Palmer in 2006, quoting Clive Humby] and many others have since parroted that sentiment. If you think about the 250-odd technology companies that populate the “ecosystem,” most are part of the trend towards audience buying, which is another way of saying “data-driven marketing.” Data runs through everything the digital marketer does, from research through to performance reporting and attribution. In a sense, the Guide is about the various technologies and methodologies for getting a grip on marketing data—and leveraging it to maximum effect.

There’s an explosion of three letter acronyms these days (DSP, DMP, SSP, AMP, etc) that marketers are still trying to sort out. Do we need all of them? Is there another one around the corner?

I am not really sure what the next big acronym will be, but you can be certain there will be several more categories to come, as technology changes (along with many updates to Guides such as these). That being said, I think the meta-trends you will see involve a certain “compression” by both ends of the spectrum, where the demand side and supply side players look to build more of their own data-driven capabilities. Publishers obviously want to use more of their own data to layer targeting on top of site traffic and get incremental CPM lift on every marketable impression. By the same token, advertisers are finding the costs of storing data remarkably cheap, and want to leverage that data for targeting, so they are building their own capabilities to do that. That means the whole space thrives on disintermediation. Whereas before, the tech companies were able to eat away at the margins, you will see the real players in the space build, license, or buy technology that puts them back in the driver’s seat. TheBest Practices in Digital Display Advertising Guide is kind of the “program” for this interesting game.

To learn more about the Best Practices in Digital Display Advertising Guidedownload the report here.

The Great Publisher Disruption

ADOTAS – Remember when you used to really depend on your local paper? For finding jobs, houses, getting the local weather forecast, selling that boat in your yard, and getting last night’s sports scores? I still do…but barely.

Most of what your local paper offers can be found in greater abundance (and at higher quality) elsewhere and, now that everyone is glued to their iPhone, rather than flipping newsprint on their commute, most of that content is only a click (or, more likely, a finger touch) away.

Jobs Section –> Monster.com
Real Estate Section –> MLS, Zillow
Business News –> WSJ.com
Weather Report –> Weather.com
Classified Sales –>Craigslist
Sports –> ESPN.com
Travel Section –>TripAdvisor.com
National News –> WSJ.com
Gossip –> PerezHilton.com

As the above demonstrates, the only area of superior content the local news website has left is local news, and even that has suffered as papers reduce reporting staff and rely more upon outside content providers to fill pages. Although local papers came to the online party rather late, they managed to quickly build reliable websites and leverage their most valuable content effectively.

Monetizing that content has fallen far short of revenue expectations for the most part. The AAAA’s recent report that ad agencies lose up to a third of their media cost servicing digital media buys (as opposed to only 2% with television) was eye opening, but probably nothing compared to what publishers feel.

Back when I was running sales for a Nielsen group, we were struggling with the fact that the same $100,000 once earned by selling a small schedule of print ads was now taking an enormous effort to create.

With print, you are simply selling space. The advertiser provided the content (a PDF) and you put it inside a magazine or newspaper, alongside compelling editorial. Publishers focused on producing the content they wanted and advertisers produced brand ads that appealed to a like audience.

Then, all of the sudden, advertisers started to lose interest in print advertising alone. Sure, maybe they still ran a small print schedule, but now they wanted some content to go along with it: maybe a “microsite” or a custom series of events, or perhaps an advertorial.

Then publishers found themselves allocating resources to writers, designers, and photographers—and acting like a small agency on behalf of their clients. Kind of cool, but the problem was that the advertiser had the same $100,000 to spend. They were all over you, and they wanted stuff like “ROI.” Publishers’ margins were compressed, resources (once dedicated mostly to producing their own content) were misallocated, and their employees were getting burnt out.

Let’s take this to 2007, and the emergence of social media. Now advertisers didn’t even need publishers to develop their content, because they could create their own blogs from scratch (Blogger) and start building online communities (Facebook). Enter Twitter and now every employee in the building has their own mini PR platform which could be leveraged for the company.

Talk about disruption. With thousands of really smart writers, photographers, and designers willing to work cheaply, from home — and with access to free, web-based tools equal or more powerful than any in-house software a publishing company could provide, now publishers were losing the only edge they had: the ability to produce content at scale.

The Googles of the world will always argue that they “need” content providers like The New York Times to continue to provide thought leadership, but web-based content marketplaces like Associated Content and others have only validated the concept that traditional publishers (no matter how big their websites are) are losing their power positions when it comes to content. (Except WSJ, which produces content so exceptional that people are willing to pay for it, but that’s for another article).

So, in this new reality, the publisher is left trying to protect his last tangible asset: his online advertising inventory. He can’t sell subscriptions, he can’t pay to have leadership in any other category besides local news, and now huge sites can geotarget ads to create larger audiences than he has. Spot quiz: who has more unique users in the Anchorage, Alaska DMA: Yahoo or the Anchorage Daily News? I don’t know either, but this is part of the problem.

When the starting point for most computers is search, local media misses the boat on what used to be their wheelhouse. Search for “Anchorage restaurants” on Google, and Fodors, Yahoo, and the local visitor’s bureau sites come up before ADN.com.

In response to this atmosphere of ever-increasing margin compression, competition, customer dilution, and constant need to understand and embrace new technologies, local publishers turned to the experts in online revenue monetization: networks, exchanges, and aggregators. Now (with networks and exchanges), as simple as placing a few ad tags throughout their pages, newspapers could monetize the 70% of inventory they couldn’t sell directly.

Establishing a daisy-chain of ad calls to backfill their unsold inventory was easy, and at least there was some visibility into revenue (amount of impressions available, divided by 1,000, times 65 cents). Despite the ease of use, the rates continue to be painfully cheap, and you never can really tell what the tolerance level of your audience is for an endless stream of teeth whitening, tanning, diet, or Acai berry offers will be.

Aggregators like Centro, LION New Media, Quadrant One, or Cox Cross Media offer a much better solution: real advertisers that need and respect real local inventory. These aggregators provide a great one-stop shop for advertisers and agencies that may not have the depth of knowledge (or personnel) to negotiate and service a multitude of small buys on dozens of local media sites.

As a result these aggregators earn the money they arbitrage by providing the expertise to buy local media at scale. Smarter companies like Centro are leveraging the in-house systems they have developed over the years to navigate this process and making it available to agencies directly (Transis).

However, when it comes to selling premium inventory, specialized sponsorships, or anything beyond standard inventory, the aggregators can’t really play in that space at scale; advertisers still need to partner with local media to make those deals happen.

Ultimately, I see local websites winning by being able to offer more than just inventory. For them, hustling uniques and impressions is a zero sum game. They will never compete against the networks and (with 65-cent CPMs on their remnant space) the networks and exchanges aren’t exactly their best allies.

What agencies need is for technology to help them scale the way they reach advertisers, in an open and transparent way—and systems that give them the ability to do more than place an ad tag on their pages and pray for a good campaign to hit the transom.

We feel the future for publishers is an open marketplace that enables good local media sites to package their premium inventory to advertisers who truly value the local audience: the regional ad agencies across the country who service the local hospitals, schools, banks, and businesses that need local content aimed at local customers.

Ultimately, publishers need systems that can give them placement level control over their inventory, total pricing and deal point control, and access to both agencies and direct advertisers in the same environment. There should be a place between getting a 75-cent Acai berry ad on your homepage and running a $50 CPM rich media expandable.

Publishers need to be able to negotiate both types of deals, and do them at scale, with total control. An open and transparent marketplace that enables publishers to market their entire inventory—not just remnant—is where the future is headed.

[first published in Adotas, 4/1/2010]

Notes from DPS 2011

Going Beyond Content and Delivering Value in a Multi-Platform World

Deer Valley, UT – If there is one thing I learned after spending several days at Digital Publishing Summit 2011, is that the people in this industry really love what they do. It’s not easy walking past world class spring skiing in what is arguably the United States’ best ski area, and enter a dim conference room to listen to a speech on “Auto-nomous Data Management,” but every session played to an SRO crowd of media and technology executives. The crowd was a veritable who’s-who of the “Digital Display Advertising Landscape” (LUMA) map, so I suppose you could argue that these guys got where they are today by skipping lots of fun, and building advertising and media technology instead.

Among the highly informative (albeit sometimes sales-y) content at the conference, there were some gems to be had. So, here is DPS 2011, organized by quote:

“Value is shifting from those that produce the content, to those that deliver the experience of consuming it.” – Saul Berman, IBM

Saul Berman’s keynote address touched upon the disruption happening in our space, but even the overhyped keyword “disruption” doesn’t touch upon the true chaos happening as publishers learn how to navigate the through all the new social media, exchange-based sales, and various technology partnering opportunities out there. Do you make Facebook Connect your friend (as Kristine Shine from PopSugar Media does), to drive new unique visits, and build your audience? According to Shine, for her organization, the call was to “go all in” with Facebook. For others, like Todd Sawicki, CRO of Cheezburger, Facebook can kill publications by migrating all of their native traffic (like message board comments) to their environment, without returning the favor.

So, for publishers, the challenge is not just continuing to produce quality content, but to make it for a multi platform world, where consumers are just as likely to value the way they are consuming it. That means having a multi-platform approach—and a multi-revenue approach as well. Why does a full song from iTunes cost $0.99, but a 10-second sliver of that song, sold as a ringtone, cost $3.00? In that case, it is the application of content in a clever way that adds value, a nice use case for anyone monetizing content in an experiential way.

“Media will be sold like pork bellies” – Frank Addante, Rubicon Project

There was quite a bit of discussion around pricing at the conference, and the founder and CEO of the Rubicon Project was not wrong in insisting that, without significant changes, media would indeed be as commoditized as the humble pork belly. Unfortunately, this trend has already happened. Addante was right to highlight the unfortunate fact that the same article in the NY Times commands a $20CPM in print as opposed to $2CPM online. That value gap, Addante argues, can be closed by “realizing the true value of digital experiences.” Rubicon would like to see one big gigantic “open market” that enables the industry to expand the digital advertising pie from $40b to $400b with full participation, but the details were cloudy. If that market concept involves having publishers suddenly not to sell their entire remnant inventory into an exchange, then maybe we can avoid the pork bellies fate.  Addante may be on to something, however. What the industry needs is one trusted third party aggregate high quality inventory, and create value around it, but that battle is in its very nascent stages.

That being said, a good bit of the conversation was around pricing. Both Saul Berman and Tim Cadogan of OpenX deployed the airline pricing scenario, to argue for dynamic pricing models. For Cadogan, three levels of inventory equate to three levels of seating: Exclusive (first class), Premium Guaranteed (business class), and Non-Guaranteed (coach). Just as airlines frequently change the configuration of their seating to account for their routes, seasonality, and passenger mix, so must the industry dynamically price inventory, based on its placement and value. The OpenX Enterprise server hopes to achieve that by putting guaranteed and real time exchange inventory into the same platform, and use smart decisioning  technology to maximize yields. A very smart idea.

For Berman, it was not only about “having 5 different passengers, paying five different prices,” but also about exploring entirely new revenue models, like Apple did in “switching the razor blade model” with the iPhone (expensive “razor,” cheap “blades”). Publishers must go beyond monetizing their content through advertising, and start looking at generating revenue from the larger  “marketing” bucket. Right now, that is called “selling apps.”

“Premium brands need to be associated with premium content” — Eric Klotz, Pubmatic

Truer words have never been spoken. Klotz explored some recent survey data which asked publishers and advertisers how the way they are buying media is shifting. The results were fairly predictable: more and more budget is finding it’s way into real-time bidding environments, as brand and direct marketers seek new ways to target their desired audiences. That’s nothing new. What is changing rapidly, however, is that all marketers are demanding more placement control, increased transparency, and brand safety. Brands want the same direct connections with publishers they have enjoyed with guaranteed buying, with the ease and cost efficiency of exchange-based buying. The takeaway? If you are a publisher, and not looking at building private exchange connections with your demand side partners, you are in trouble.

That sentiment was hinted at in a panel called “Selling in a Cluttered Market.” For Jonas Abney of Hachette Filipacchi, “general content gets beaten by specific content every time.” Marketers are looking for laser-focused, topical content that captures user intent, rather than more generalized content. Moreoever, today’s advertising sale is more educational than ever. For panelists like AdMeld CEO Michael Barrett and PubMatic’s Andrew Rutledge, a sales force cannot simply have media experience–they have to know the ecosystem, and be prepared to add value by educating clients. For Whitepages VP of Sales Craig Paris, it is simple math: Agencies get 100+ unique sales calls a month, from an increasing amount of new technology and media companies. Unless you differentiate yourself, you are not going to win business. “Thirty percent of your day should be spent reading the industry trades so you can have credibility, and provide insights to your customers.”

“Nielsen says people visit 2.9 sites a day, and one of them is Facebook” — Greg Rogers, Pictela

Last minute speaker Greg Rogers of Pictela provided some insights on how premium advertising units (specifically the new IAB 300×1050 “Project Devil” unit from AOL) can drive user engagement. If the above quote is true, it means that brands have to find a way to engage the user more deeply on the the sites they visit every day, and that way is through interactive units. Rogers has data that points to “dramatic” CPM increases from premium RM units, and makes a case for replacing three 300×250 units with the single 300×1050 “devil” slot. Patch and Huffpo have seen great results, and advertisers are getting good engagement, and plenty of reporting. Highly premium, brand-safe, engaging advertising…sounds like something from the past called “premium guaranteed.” I bet PopSugar’s Shine would agree. She has built a virtual in-house agency to build premium campaigns for her customers, and demands “150% control over every ad unit on the page.”

“Cookie Targeting Doesn’t Scale” — Michael Hannon, Aperture

Sort of a dark horse moment for me was Michael Hannon’s first slide, which threw down the gauntlet on cookie targeting. All the energy in the space for the last several years has been about  targeting using 3rd party data . But what if it doesn’t work? This is the 900 lb. elephant in the Ecosystem. Not only have many marketers had difficulties achieving significant scale when overlaying data on top of exchange buys, but the legislative tsunami of “Do Not Track” threatens to reduce that scale even further. Hannon makes an elegant argument for real audience measurement, and doing so in a cookie-less way.

That leads me to a great conversation led by Alan Chapell, a lawyer specializing in just these types of issues. In a room full of ad publishing and ad technology executives that depend on using data to identify target audiences, there was a great deal of confusion regarding how our industry is getting on top of what may be a very severe problem. More direction from the IAB in the form of specific self-regulatory principles and mandates is needed, and needed fast. For Chapell, inaction may cause the “privacy disaster, which enables Google, AT&T, and Facebook to own all the data,”  leaving the rest of the industry on the side.

[This article originally appeared in Adotas on 4/4/11]

The Next Printing Press

Today’s Magazine Publishers have to be Sales, Content, and Technology Organizations to Survive

By Chris O’Hara

 

I am sitting at the airport bar in Dallas, trying to get back to 2010. After attending the Dallas Ad League’s Magazine Day event at the Fairmont Hotel, I feel as though I journeyed to 1995 and back again. Not that I have anything against attractive, skirt-suited southwestern sales directors and their handsome, eminently polite male counterparts. Nor do I have contempt for the magazine industry in general, as many “new media” bloggers seem to. I came from a magazine background, and love magazines. But the atmosphere was decidedly 1999: folding tables stuffed with magazines, sharply dressed sales reps talking about “custom opportunities” and “special sections,” and not a computer display in sight. The lunch itself promised a lively panel discussion that would inform the 200+ attendees what the “digital future” of magazines would be, but the forum was a panel discussion, bookended by two gigantic monitors featuring a single, non-interactive PowerPoint title slide for most of the two hours.

A large portion of the day’s panel discussion was dedicated to the new, $90 million “magazines” campaign, designed to make advertisers feel better about spending money in their products (the “interactive” portion of the event featured the “magazines” video where Jann Wenner (the former editor and publisher of Rolling Stone) and Catherine Black (President of Hearst) get all feisty about audience engagement). Did you know that, during the 12-year lifespan of Google, magazine readership increased by 10%? Or, that “ad recall” has increased by 13% over the last five years? Neither did I, which is why this campaign is so important. Despite the bloodletting of the past several years, magazines remain a highly relevant part of the media landscape. “Magazines have enduring values for readers and advertisers that have gotten a little neglected and misunderstood in the era of Internet instant buzz and chatter,” said Jann Wenner, chairman, Wenner Media. “Magazines are beloved and powerful in people’s lives for very good reasons that need to be remembered and reinforced. That’s what this campaign is about.” Although, I am not sure how one can “misunderstand” a magazine, Wenner’s point is well taken.

The panelists (David Carey of Condé Nast, Michael Clinton of Hearst, and Stephanie George of Time) all did an admirable job of toeing the line. That being said, anytime you see those three so buddy-buddy on stage, you better watch out. Obviously, this new industry love-fest has a lot more to do with survival than pure affection. If their consortium can produce more than a print advertising campaign (irony alert! The best concept these guys could come up with to save their industry was a print ad campaign!), they might actually be dangerous.

The takeaway? These companies were training their employees for the digital age (“some are really adapting, and some are struggling with making the transition,” according to George). They are doing oodles of “custom media” for their advertisers—and even acting like agencies for many of their clients (something that I am sure the WPPs and Omnicoms of the world are enjoying), according to Clinton. And all of them are “building apps.” Lots and lots of apps.

Sounds good.

I wondered, however, when these guys all decided they didn’t want anything to do with the platform itself. The “power of the press” was always based on the fact that the average Joe didn’t have much of a voice, because he couldn’t afford a multi-million dollar printing press. Sure, he could shout from the rooftops and rabble-rouse in the local coffee shop, but that was basically it. The major publishers controlled the loudspeaker, and they could decide to what purpose they would drive their message (start a war, make scads of cash, anoint a president, etc.). Sure, print’s voice got diluted with the emergence of radio and television, but print journalism (the real stuff) still drove the message and shaped the conversation. Anyway, there is really no need to dig up this old conversation; we all know how the internet gave everyone their own printing press (blog), television station (YouTube account), and the means to capture “stories” as a “citizen journalist” (mobile phone).

When did the publishers decide to give up their platform? Why aren’t they leveraging everything they have to standardize the content creation business, and building the next great platform? It’s because they were focused on being sales organizations, rather than content organizations, or even technology organizations. At a certain point, a long time ago, things got mighty comfortable in publishing land. The industry that created the ability to print a trillion newspapers every night and get them into America’s driveways by 5AM, got fat and happy on loads of advertising money, and they started building immense sales organizations, and dedicated all of their creativity and emotion to increasing readership, ad pages, and revenue.  In the meantime, the very platform that they were building this organization on top of was thinning out, and starting to teeter, as disruptive technologies ate away at the foundations.

The magazine business is still a very powerful beast, though. Some 300,000,000 magazines were sold last year, and they generated $19.45 billion in advertising revenue, according to the Publishers Information Bureau. As our panelists pointed out, the average newsstand consumer still just about trips over themselves to shell out $4 to read the latest about Lady Gaga and poor, bamboozled Sandra Bullock, so magazines aren’t exactly dead yet. They still control some very powerful content, and they are starting to get themselves in a position to undo some of the damage they inflicted upon themselves (it should be noted that all of the panelists issued very refreshing mea culpas when it came to the ginormous mistake of making all of their online content free, and depending on banner advertising revenue to fill the gap. Needless to say, that gap only grew wider over the last 15 years, creating the monstrous chasm that exists today). To fill it, these magazine publishers are looking at the iPad as the greatest thing since the PDF replaced film in their production departments.

Early iterations of online magazine publishing “solutions” tried to bring the advertiser value by taking that PDF and putting in online, where readers could see full-page ads, and enjoy the beautiful layouts that make print so special. Later iterations—featuring in-page video, ad “hotspots” with enhanced product information, and other interactive features—also failed, due to the nature of the engagement. When a reader goes to the web, he is often looking for “quick bites” of content, not necessarily the longer, more relaxed, engagements that he ordinarily sets aside for a magazine reading session. The iPad and other smart mobile devices promise a reader that wants an interactive experience, but is more engaged and willing to spend time with content. Maybe he is being held captive by a plane, train, car ride, or (dare I say it) boring business luncheon. The iPad user expects interactivity, and something more than just printed content, and he is willing to pay for it.

The last part of that sentence is really what today’s Ad League Luncheon was really all about. Magazines are the king of the opt-in relationship. People pay good money to get magazine subscriptions, and advertisers know that they are reaching people who are truly engaged with that content. That’s the only kind of validation that’s truly important, and it’s so much more reassuring to an advertiser than a Quantcast or ComScore data pull. People have limited time, and limited money. As an advertiser, I know that I will at least have a chance to “have a conversation” with the reader that has plunked down his hard-earned money to spend some quality time with the content my ad is alongside. That translates to the web, when I start being able to charge for subscriptions—and ultimately lifts CPMs (called WSJ.com lately)? And it translates to high CPMs for whatever advertising we will start to find on iPads and other mobile devices where consumers are willing to pay for applications.

For today’s print publishers to truly recapture the ongoing attention of the modern advertiser, and stay relevant in the post-print era of modern advertising, the prescription is obvious, although difficult:

Make it Exclusive: What sets the price for any product is its supply vs. its demand, whether it’s coffee, hotel rooms, or content. New York City Mayor and media tycoon Michael Bloomberg didn’t get rich because he had the best content. He got rich because he has access to proprietary content that no one else had. The successful content organization has to be able to have the research, stories, and data that no one else has—or present that content in a format that nobody else can match. Whether you are the National Enquirer buying off Perkins’ waitresses to get the Tiger Woods scoop, or you are a B2B publisher with a trade magazine that rounds up the day’s prices for pork bellies on the Chicago Mercantile Exchange, you have to lead with content that people can’t find anywhere else easily. The nature of the content always defines the value of the audience, and content companies always win when they can charge enough to break even on the content production, and make the advertising the gravy on top.

 

Make it Expensive: It’s funny how people will plunk down good money for a magazine subscription, but hesitate to pay even a few dollars a month for that same content online. A magazine is an object of beauty, with some heft, and (depending on the title), conveying a certain image. Like it or not, reading the New Yorker in an airport lounge says something about you—just as digging into an issue of ESPN Magazine, or the Economist. Magazines are consumer products, and sold like them, their covers designed to spur us to pay a good amount of money to grab them off the shelf. If I am an advertiser, shouldn’t I expect a reader to be willing to pay $30 a year for all the content you produce? Shouldn’t I demand evidence that your publication is more valuable than the thousands of other free content sources available in your vertical? I think some magazine publishers are finding out that their content isn’t quite as valuable or differentiated as they would like to think. Maybe, after underpaying writers, editors, designers, and developers for decades on end, the reason many hot content producers set off on their own is because they see the opportunity to get paid higher prices for their content (or at least, be able to own it outright). The modern magazine publisher has to get back to producing exclusive, expensive content that readers are willing to pay a premium for.

Make it Interactive: About 4 years ago, I was working for Nielsen and getting pitched by a highly progressive interactive company that was taking magazine reading to the next, interactive level. They had an online magazine that blended social media, video, in-page advertising, and a great package of analytics to tie it all together. You could literally look at a typical magazine fashion shoot, mouse over the various products within the photo, and get instant product information, pricing, and find out where to buy the object(s) of desire. Now, add in location-based marketing with mobile devices, and you have a whole new, highly relevant type of interactivity that today’s publisher can leverage. The fact that most magazine websites are still HTML-based and feature standard banner units speaks volumes. The problem wasn’t the concept or pricing of some of the great online magazine ideas. The problem was that AOL (and other online players) defined the platform before the best content producers could. The magazine industry came up with the 468×60 banner (Hotwired.com), but AT&T had to buy into it to create the standard. Now, it seems as though the advertisers have more say in the process of establishing advertising standards than the publishers. Chris Schembri, VP of Media Services from AT&T (the sole advertiser on the panel) made it clear that marketers were looking for leadership from their publishing partners around creating the digital content standards of tomorrow. Advertisers like Schembri need their publishing partners to create new standards that leverage technology to make their advertising more relevant to today’s audiences. Publishers cannot let their advertisers (or online portals, platforms, and ad networks) tell them what they can sell.

Own the Platform: The biggest challenge facing today’s magazine and newspaper publishers is getting back control over the interactive delivery platform itself. Look how the music industry lost control of their delivery system, and the billions of dollars in lost revenue that engendered. Once technology made it possible to remove a song from a CD and share it with hundreds of people for free, the music industry was sunk. Like publishers today, they found themselves looking to Apple to build a modern platform that would once again value their content. They are finding a rough peace with the 99 cents a song deal they got from Steve Jobs. If the iPads, Kindles, and Sony Readers of the world end up creating the standard for published content, the content owners will have once again been commoditized by technology players and lack control of their own destiny. Publishers need to think about designing the next printing press, rather than have Apple do it for them.

All of this hyperbole aside, I don’t think magazine publishers will ever go away. Over the years, printed magazines, newspapers, and books will be a great luxury. People who would rather read a solid copy of Moby Dick, or fold the Wall Street Journal on the train, or flip through Architectural Digest will be afforded the opportunity to do so—at a premium price. The future for these content manufacturers, however, will be around taking back ownership of the delivery mechanism and setting the standards of tomorrow when it comes to content creation, distribution, measurement, and (most importantly) ad formatting and delivery.

That’s a panel discussion I believe would be worth listing to.

[This article originally appeared as a two-part feature in Adotas from 7/13/2010 and 7/14/2010]

SalesRants 14: Pigeon Feed

Swat ’em away, but they’ll still keep coming — those ‘pigeons’ of corporations that can’t stop flocking to consultants’ birdseed

Remember that television commercial featuring the two consultants talking to a corporate guy? It went something this like this:

Consultants: First you need to optimize your sales force using a state-of-the-art CRM tool, align your marketing message across multiple media to drive your quarterly goals, and implement a company-wide monitoring system to insure message optimization across multiple business units, resulting in huge gains across multiple metrics. This plan is sure to turn your business around.

Corporate Guy: Great! When can you start doing it?

Consultants: [Break down in gales of laughter]. We don’t actually do anything… we just tell you how to do it! [They dissolve in paroxysms of malevolent laughter].

Anyway, you get the drift. Despite the almost universal reckoning that corporate consultants do little more than sell glorified PowerPoint presentations full of the latest business jargon, companies such as my beloved Big Media Company continue to employ them. Let me introduce you to the very best consulting scam ever invented, one that Big Media Company fell for hook, line and sinker.

 

Scarily enough, it’s called “SPIN Selling.” “SPIN,” of course, is an acronym. Let me save you $500,000 and give you the S.P.I.N. Selling overview in a nutshell: First, find out what people want before you try and sell them something. Then, tailor your sales pitch to address their needs. Sounds simple, right?

Instead of barging into some agency, breaking out your media kit, and telling your customer your circulation, readership, and what special issues you have coming up, why not sit down over a cup of coffee and ask him a bunch of questions. Like: How is your business? (a Situation question); Is the price of paper leading to an increase in your costs? (Problem); Why is it important to solve this problem (Implication); and, If I lowered your rate, would this help you reach more potential customers? (Need/ payoff).

So, you SPIN a customer, slowly walking him through his situation, how it affects his business, and how you — his savior — may solve his problems using whatever it is you happen to be selling. It’s how probably 90 percent of all salesmen and 100 percent of successful ones approach their business. It’s called consultative sales or, put more simply, selling something that people need. What the company that sells the SPIN program offers, however, is more ingenious than anything that’s gone along with products I’ve ever hocked. They take what is a very straightforward and simple sales process (ask questions, provide answers) and pile a bunch of meaningless process and acronyms on top of it, creating a sales pseudoscience that, like Boggle, is “easy to learn, impossible to master.”

Let me tell you how it works (applicable not just to SPIN, but all bullshit media sales consultants and sales consulting in general): The Consultant comes into Big Media Company (the Pigeon) with a long list of corporate stooges who have used their product (IBM, Honeywell, or any Fortune 500 client whose size exceeds that of the Pigeon, and whose CEO is likely to be impressed by). The Consultant says they can increase sales by 20 percent a year using their new patented sale methodology. The Pigeon’s CEO cuts that estimate in half and still figures he’s up a few million net, even after paying the Consultant a healthy $500,000 fee. Soon enough, the Pigeon signs up, and mandates sales training for everyone on staff.

Naturally, since the test is based on the yet-untaught sales principles offered in the coursework, the results are terrible. Pigeon’s people are way behind the curve!

The Consultant comes in for about a month, and trains everyone, 20 at a time, using the same off-the-shelf Powerpoint presentation, with Pigeon’s name sprinkled throughout for that customized look. People are asked to take a test before the training to establish a “baseline” of sales effectiveness. Naturally, since the test is based on the yet-untaught sales principles offered in the coursework, the results are terrible. Pigeon’s people are way behind the curve! Compared to (insert Fortune 500 company’s results here), Big Media Company is a non-player in the 12th percentile!

The training commences, filled with obscure terminology and acronyms designed to turn what is essentially an easy-to-understand concept into something on which you can slap a patent. After the trainings are complete, another test is administered to make sure Pigeon’s salespeople have absorbed the expensive, mandated training. Lo and behold, the results come in, and Consultant has really made an impact! Compared to the initial baseline results, the latest monitoring shows that Pigeon’s staff is really embracing this new sales dynamic! Sadly, however, there is still work to be done. We show that IBM’s salespeople achieved a 15 percent higher result on their post-training assessment, so we recommend a further dose of advanced training (at a discounted rate of $250,000).

You get the gist. By the time Big Media Company — or any other Pigeon — realizes that their sales are about the same as last year, and that Consultant’s package is perhaps better suited to selling something like consulting services, rather than classified advertising, it’s too late.

Moral of story: Never buy something from a salesperson who is full of more shit than you.

[This post originally appeared in MediaBistro, 8/30/2006]

SalesRants 8: Stage One=Denial

How big of a deal is it really when a huge account falls through? Secret Sales Guy’s about to find out

A Salesman Runs Through It
Besides teaching me fun, homespun, business-related jargon such as “all sizzle and no steak,” and “let’s chuck some jelly at the wall and see what sticks,” my first Publisher taught me something pretty valuable about the business.

“Sales Guy,” he said, “What does a tea bag string manufacturer in India, a coffee grower in Guatemala, a Starbucks owner in Baton Rouge, and a manufacturer of coffee roasting machines in Dusseldorf have in common?”

“Beats me, Boss,” I answered, “They are all B-level prospects?” At the time, I was working for a business magazine about the retail coffee business. Boss looked at me with barely hidden exasperation — and some pride. He was training me, a former senior editor, to be a salesman.

 

“Yes, and no, Sales Guy. You see, these people have absolutely nothing more in common — besides being in the coffee industry — than the fact that they read Retail Coffee Journal,**” he said. “They may never meet, but every month they look forward to reading our magazine and catching up on the latest news. We are their lifeline to the industry, and we are the strongest community they are a part of.”

The information was, frankly, somewhat stunning. Did over 50,000 people with a tangential relationship to the coffee business really depend on RCJ to bind them together? Was the CEO of the Singapore-based coffee export company sitting on the throne for his morning constitutional and reading it at the same time the Honduran plantation owner was leafing through RCJ with his evening Cuba Libre? Amazing. The idea that our small business magazine was influencing and binding this disparate community together was intoxicating.

As our new sales guy — armed only with an outdated media kit, a BPA statement, and a corporate AmEx card capped at $4,000 –I was going to be the brand ambassador for RCJ. I would be an intrepid man on the street funding our wise editorial one $6,790 net page of advertising at a time, until the entire coffee industry was bound under our glorious banner. While I was at it, I would also collect a copious amount of airline frequent flier miles, and have the opportunity for much duty-free shopping. It was the ultimate dream: a way to be on the business side of publishing, and also work for the greater good.

The dream lasted until Guatemalan coffee roaster went 120 days past due on his first two pages of advertising, slashing my September commission check in half. There were a few more bad apples in the “community” as well, leading me to believe that the international nirvana of RCJ was more like a melting pot of mediocre businesses all struggling to make a buck off of Starbucks. The airline miles kept adding up, though. But after a few swings through industrial centers in Germany, Central America, and the midwestern United States, the glory of “international travel” has diminished faster than the balance in my Chase account.

Lord, help me believe again.

Stage One=Denial
We lost a big one today: Big Electronics Company decided to pull the plug on Project New Media, a $300,000 whammy of a sponsorship with more bells and whistles than my daughter’s new tricycle. It had everything: print, online, live events, Webcasting — the works. It was the project that proved #1 Industry Magazine was more than just the leader of the pack in terms of market share — we were a cutting-edge Publisher, ready to “deliver the leading edge in content-based marketing.”

The saddest part is that our plan worked. We produced beautiful advertorials about Big Electronics Company’s latest equipment. We built them a Web site with famous people using their gear. We packed auditoriums full of enthusiastic business consumers, ready to get the latest technical information about their products, and offered them a “hands-on user experience” with Electronics Company’s latest products.

We delivered ROI like nobody’s business, too. Mailing lists, online statistics, survey data, user feedback, banner ad stats. You name it, we had it. Then we sat down in front of Big Electronics Company with our Powerpoint, ready to get our renewal (the net cost of which had already been factored into our fourth-quarter P&L), and got the Heisman. The big “talk to the hand.”

What happened?

New Guy was in charge now, and he had other ideas about Big Electronics Company’s marketing. Our ambitious program wasn’t his idea, and therefore he wouldn’t get enough credit for its success.

Well, it turns out that the guy we sold this albatross of a program to got canned, walking off into the sunset with an early retirement package and a consulting job. New Guy was in charge now, and he had other ideas about Big Electronics Company’s marketing. He was going to “shake up the team” and “bring in some new blood” to their stodgy, yet reasonably effective, business media plan. Bottom line? Our ambitious program wasn’t his idea, and therefore he wouldn’t get enough credit for its success.

I haven’t told the team yet.

[This post originally appeared in MediaBistro, 7/17/2006]

SalesRants 6: Big Media on the Block

B2B publishing outfits are being sold left and right—is Secret Sales Guy’s next?

Thank You for Your $upport
Let’s be honest, shall we? Secret Sales Guy (SSG) didn’t leave his comfy editorial position to go into sales because he loves it. No, sir. Secret Sales Guy has a cute wife who didn’t grow up on the Lower East Side—a wife who expects a regularly scheduled manicure, pedicure, and dye job. He also has two lovely children, who expect and deserve an education at the college of their choice (well, since they’re only in preschool, let’s just assume that they’ll expect it soon enough).

In fact, ever since leaving New York city, Secret Sales Guy has seemed to inherit two of everything: two kids, two cars, two dogs, and even a manly pair of love handles. Let’s not forget the monthly commuter pass, Metrocard, lunch money, school payments, babysitting, and anything and everything else that requires a modest amount of bread to capitalize. Anyway, you know the next part. SSG now has to find a way to pay for all of that so he can stay married, keep oil in the burner, and eat meat at regularly scheduled intervals.

 

In publishing, keeping this whole enterprise afloat ain’t too easy. At the very low end of six figures, I occupy a fairly annoying demographic position: people who are statistically “rich” but, by East Coast standards, live a fairly cash-strapped and frustrating existence. Despite the fact that the monthly commission check has been fairly chunky of late, most of it is well spent before it hits my bank account, and there’s a long list of people lined up to take a piece of it. Luckily, SSG has been lucky in real estate (like everyone else), so he knows that upon death, there may be something for the family to fall back on. For now, it’s root, hog or die.

So, dear reader. don’t underestimate the casual way SSB approaches sales. He may appear nonchalant, but that next big program he sells you just may mean the difference between pasta and beer versus a nice ribeye and a decent bottle of Cabernet. Agencies and clients: Won’t you please support SSG?

The Friendly Buys
I just read that a bunch of private equity guys finally bought a big competitor of Big Media Company, Dutch publishing conglomerate VNU. The owner of Nielsen (the TV ratings people), AdWeek (the well-written, yet somehow annoying media magazine), and a bunch of other prime periodicals, data companies, and trade shows. My beloved Big Media Company is probably champing at the bit to do the same. With print sales taking a bath and new media money not pouring in for publishers like everybody said it would, it’s time to get the hell out. Or, maybe, time to buy something else.

Coming on the heels of other groundbreaking B2B media deals, VNU’s sale was no surprise. Those private equity guys are about as gentle as an 18th century proctologist, to boot.

Coming on the heels of the Primedia deal, Hanley Wood, and some other groundbreaking B2B media deals, VNU’s sale was no surprise. Those private equity guys are about as gentle as an 18th century proctologist, to boot. Thomas H Lee, KKR, and Blackstone Group are all about the people, aren’t they? I can picture them, sitting around the old Polycom conference call unit, big jugs of Voss designer water in front of them, talking about how they can improve the company health plan and add an extra percentage point or two to the 401K matching contribution.

We’ll see how long it takes them to lop off a few choice divisions, and I wouldn’t be surprised if my beloved Big Media Company doesn’t end up with a few of them. You know what they say: If you can’t grow revenue on your own, you can buy your way into some. Buy a few mags, fire all of their back-office and production staff, and double up your own staff’s workload. Same fixed costs—double the productivity!

Sure, you’ll lose about 25 percent to attrition, but the job market’s tough for the low-end employee, and there are plenty of folks out there willing to brave a four-hour round trip commute to make $35,000 a year. Now you’re talking about real margins. The important thing is, what does this mean for your loyal and dedicated Secret Sales Guy? Will I get another magazine to run? Will Big Media Company follow VNU’s lead and start shopping my magazines around? Stay tuned…

[This post originally appeared in MediaBistro, 7/5/2006]