• by Ari Rosenberg , Op-Ed Contributor, July 29, 2005

One point of confusion in these columns has been the use of the term "publisher" when talking about the media sales process. I use this term broadly to cover any company that sells advertising. This can include a television network, a billboard company, a magazine, a Web site, the Yellow Pages, or anything that involves the publishing of content that produces consumer attention. The confusion occurred because I tend to share specific examples within mediums I have intimate experience with. Sorry about that and I encourage you to apply any media sales theory I share to your medium of interest and invite you to contact me for further clarification if needed.

Speaking of publishers (smooth huh), "we" are always looking to sell "what's next." Today it is podcasts, yesterday it was direct e-mails, and tomorrow it will be "epaper" that receives content electronically and dynamically via satellite according to Bob Sacks, a print publishing visionary.

One thing is certain in the uncertainty of our business, what's next always shows up. It keeps conversations flowing carrying innovation along the way. Consumers may dictate what's next by their usage and advertisers may open up spots on their media plan to accommodate it. However, it is the ad agency and their media buyers who successfully ignite publishers to deliver a new ad product to market (the influx of video ad inventory on the Web is an example of this ad product food chain).

Newly developed products however, often pose a challenge for publishers to price and errors are irrevocable. For example, when direct e-mails first became hot, the consensus was to sell them on a per-name basis, which would equate to a cost per thousand sent. This felt like the right model, but look at the price erosion that has occurred.

Publishers are now selling direct e-mails at a price an ocean away from what they were getting when the product first launched. Many will excuse this as a natural occurrence based on supply and demand, but I contend it was also a defectively priced product. By selling on a "per-sent" basis, direct e-mails are bought with high response rate expectations and a low perceived value for the actual ad exposure. If the rate were derived from "opened" e-mails, publishers would have an incentive to sell relevant e-mail drops and the intimacy of the one-on-one exclusive ad exposure would enjoy a higher perceived value. More importantly, the cost would go up as the open rate increased versus the current pricing model that lowers the cost (less than two cents a name for example) when more e-mails are sent.

Today's "what's next" product of podcasts feels a lot like opt-in direct e-mails in stereo. I have never sold one as part of a package, but if I did, I would avoid the pricing mistake made with direct e-mails by selling and pricing them this way:

First, I would sell a sponsored podcast in a way that will help drive the download rate. The content carries a fair amount of that responsibility, but a salesperson can include a promotion to help induce the perception that greater downloads will occur. This is where I would borrow from our quirky childhood friend Willie Wonka and hide some "golden tickets." It's a simple way of creating excitement around the podcast of interest. For example, Martha Stewart Living could offer their readers a podcast on "Ten effective ways to reduce stress"and 10 lucky readers will hear they have won a week of vacation at Canyon Ranch (aka the advertiser).

A talented salesperson working for me came up with a great idea for Intel. The concept was an online video game tournament between the editors of our site and the tech heads at Intel. The tournament became a carrot for the marketing department at Intel to use internally fielding a team. We promoted the tournament on the site, and readers voted on who would win. The tournament was a huge success. Our clients came to our building to enjoy the live event and to watch their team destroy our editors.

The microsite that charted the Intel victory and the voting that took place prior to it had Intel imaging attached to it. The editorial coverage enjoyed a front-page spot for three days amounting to millions of impressions. Instead of trying to assign a rate to this, we gave it away free in exchange for a greater portion of their budget and premium priced ad impressions that supported the cost of the buy.

What does this have to do with pricing podcasts? Create an exciting promotion using podcasts and make it free. Use the perceived value to help get more pages, more impressions, more billboard exposure, or more of anything that a publisher can price more easily than a new product heavy on excitement but light on the metrics needed to price it.