Question from a digital seller: I was expecting a bit more action before fall hit, but it doesn’t seem like my deals are coming through. Last year was easier than this, and I thought the economy was better now. Why am I having so much trouble closing?
Amy says: I don’t know if the economy is really that much better for most folk, but there is a lot more going on in the media marketplace that is the cause of your woe. Business objectives for our clients are still quite aggressive, and there could be a conservative approach to spending toward the end of the year. Cutting media spend goes right to the bottom line, so that is always a danger.
More likely, what is happening is that you are a victim of the rapid evolution over the past year. Agency trading desks have gained traction, and data is king. The display marketplace has definitely matured. Banner campaigns generate results, but the CPMs in the real-time bidding space are so much lower than premium. Sometimes performance is a direct function of reach, and price and context may not have any effect on performance. As long as the inventory is in brand-safe environments, the efficiencies gained trumps the need to be in contextually relevant environments.
Data is becoming more and more important, and the number of players in the space is growing. Many clients are able to use data effectively and even more are experimenting with their own and third-party data. Any site with a large audience should have a data overlay to all their offerings. Reaching specific users via audience buying will continue to grow, so balancing this approach with premium content may be a silver bullet to keep the revenue coming in.
A few other tactics are pulling money away from typical display advertising budgets. Social media performance-based pricing is making it easy for clients to test and learn. Mobile growth is continuing, with smartphone penetration reaching all-time highs. And as new business models are created for platforms and technologies yet to be launched, there will be even more reasons for clients to pull money out of the established display allocations. Add one or two test components and some budgets could lose 20% of planned. This could happen after your RFP has been submitted, so try to find out what you are up against.
The good news: This is a call to arms for our maturing channel to evolve as quickly as all the new stuff. If the normal sales tactics are working in terms of getting time with agencies and on RFP lists, then I would say that the products your property offers are getting scale. Think big, and let’s try to bring the display business to the next level. Viewable impressions, less clutter, and better analysis of your audience are options that may work. If content is your model, survey your audience so you can confidently say that content still matters to consumers. We can’t be complacent anymore and take it for granted that banners are going to continue to be the leading digital currency.
Jason, what do we need to do to get to the next level?
Jason says: I’m picturing our question-writer with a large dirt hole in her backyard meant for a post-bonus swimming pool. Since it’s football season, it makes sense that Amy is getting us back to the basics of blocking and tackling. Much of what you say, Amy, resonates with me because it seems so simple. However, if sale people are having trouble closing deals, they must make a concerted effort to analyze what they are selling and to whom.
This sounds so basic, but don’t take it for granted. Take a moment to find out what is really being measured as a KPI. Don’t just listen to the 10,000-foot RFP statements like, “We are looking for a branding campaign," when the document states that they are measuring CTR.
Advertisers have taken comfort in very basic metrics to gauge their digital advertising success. Recently, I’ve been calling this effort “Scorecard Marketing.” It means that advertisers focus their marketing efforts on tactics that result in something that can be read easily on a scorecard. Those measures are (in no particular order): clicks, fans, likes, followers, shares, and tweets.
Ask yourself, “Which one of those am I selling?” It’s fine to try and sell marketing products that are farther upstream using brand health metrics like awareness and favorability. But it’s imperative to know what your advertiser is looking for when judging your success. If the answer to that evaluation is any of the above six metrics, it’s time to join the real world. Don’t kid yourself that you are delivering something more robust like brand health when the advertiser only cares about a rudimentary metric.
You’ll notice that I didn’t put the word “impressions” on my scorecard. Find me the advertiser that is bragging, “I served 1 billion impressions this month!” and I’ll guarantee a Jets Super Bowl victory this year. However, the list of advertisers who crow about how many fans, followers or tweets they have is as long as the list of disappointing Jets performances over the past 40 seasons.
Why would an advertiser be so locked into such a metric? Most likely, it’s to keep score with 1) its own efforts at this time last year, and 2) its competitors' stats. I suppose, if you are the digital marketing lead at McDonald’s, you want more fans than Wendy’s. Coke wants more followers than Pepsi. You get the idea. However, is this really important for their business? Does it even matter for you as a salesperson? As much as you like to be a partner to your clients, if they only care about one or more of those six things, they have a limited use for you. You are a number on a spreadsheet that can be replaced or upgraded at any time. So, if you want to close more business, you need to find out what game you’re playing.
That said, don’t just race to the bottom. We can’t let it happen in this business. We’ve come too far to be treated like a dumb metric that doesn’t always correlate to success. Just because your advertisers want to treat you like a replaceable number, don’t let them. David Ogilvy was famous for saying that the most important thing an advertiser does is to sell. The most important thing a digital sales person can do is show that advertiser how best to buy. Hopefully, you'll be floating in that pool by next summer.