Commentary
Are Ad Salespeople Doomed?
- by Daniel Ambrose , February 18, 2010
During those 12 years of Google's growth, a whole range of other automated sales systems and advertising marketplaces have been created. Many have died, but new ones are still being created. Google itself is still hard at work trying to build automated systems, after failing with its automated newspaper ad buying system a few years ago. Google now has "Ad Planner" a so-called "market" in beta testing that tries to bring buyers and sellers together. Adap.tv is the latest new one in the video arena.
As publishers and salespeople conduct their personal "what does it mean for me" calculus, many are wondering if automated buying systems will replace the way that advertising has been sold and purchased, supplanting the salesperson with a computer.
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I'm here to calm your nerves. Despite the "commodification" of media, salespeople and publishers will still be needed and will thrive for the foreseeable future. It's true that salespeople will need newer skills to be stars in 2012 than they did 20 years ago. But sales will still be made, and increased, by building relationships and serving customers.
How can I be so sure?
My initial thinking on this started with the nature of the act of planning and buying. As advertisers put increasing pressure on their advertising agencies and their advertising departments to cut costs, the staffing to make informed decisions has been cut back. The surprising reaction to this has been to rely even more on professional relationships with sellers to configure proposals, and a tendency to buy and rebuy using the same trusted relationships.
I could write a book on how this relationship between buyer and seller works well for both sides. But you won't read it. You still think, probably, that the trend to automation and measurability of results will eventually drive salespeople to open bed-and breakfast inns.
So let me suggest two parallel scenarios that are relevant and instructive.
If you read the Pulitzer Prize winning history of the oil business, "The Prize," you would know that relationships were everything in this industry -- at least at first. Oil companies sold through vertically integrated, self-owned, distribution systems to local dealers. Then the evolutionary commodification of oil eventually led to the advent of market trading of "spot market contracts" priced by the barrel. Exchanges now even trade oil futures.
You would think this development would have changed everything about how oil is sold by suppliers and bought by users. It did. But it didn't eliminate oil salespeople. Oil buyers, it turns out, value someone to act as a service provider to smooth the buying process. Not every company wants to buy oil based on the volatile daily price, or even the volatile futures market prices. Salespeople help craft supply agreements that may refer to "spot market" prices, but add other factors to the purchase and delivery agreement to make the supply better-suited to the buyer.
Even more convincing should be the example of the financial services business. Financial products are the ultimate commodity. Mutual funds are merely bunches of stocks or other financial products that are priced daily, hourly or even by the second on exchanges around the world. Stocks and mutual funds and other financial services, from the "boring" life insurance, to the notorious Collateralized Debt Obligations and the many other so-called-sophisticated financial instruments (still all made up of financial products that can be counted and measured), are sold by the highest-paid salespeople in the country.
What do media advertising and financial services have in common? In both cases they have a clear and quantifiable history that can be viewed and analyzed for what worked. For both, past performance is no guarantee of future performance. Yes, that is the problem. The market keeps changing, customer behavior keeps changing, and advertisers are always trying to understand and anticipate that change. So salespeople who bring a sophisticated understanding of their customer's business and their customer's needs, are valuable. And they will be valuable as long as change keeps happening - likely to be true for a very long time.
Still not convinced? Try this: Google has more than 500 salespeople just serving the large national account sector of its business in the United States alone. Even though Ford can count every click buy, Google finds it is worthwhile to pay a sophisticated sales person to facilitate that relationship, show Ford new ways to use Google's offerings and solve problems.
So my message to you publishers and salespeople wondering about your future is, get really smart about your customers' businesses. Harvard Business Review published an article in 2004 that spells out this approach: "With buyers increasingly savvy, how can companies resist relentless commodification and distinguish themselves from rivals? An increasingly popular approach is to emphasize one's expertise in the business, as distinct from the quality of one's product. Such competence-based marketing is especially persuasive in business-to-business relationships that involve hard-to-assess goods or follow-on services."
The sale of advertising is a business-to-business transaction. It is a long-time-proven "best practice" to help advertisers understand their market in order to illustrate how an advertising purchase will work. Today this best practice is honored mostly in its absence. Salespeople who do help their customers rather than tout their product will thrive. When you can bring new and interesting ideas, valuable information, points of views and analysis to your customers, there will always be a place for you.
In the 80s and early 90's investing was a completely hands off activity. You worked with a broker or CFP who preformed all the transactions for you. In the mid and late 90’s companies like etrade created self serve interfaces which allowed more sophisticated investors to executer their own trades. Those self serve platforms have evolved and so have the attitudes and comfort level of self serve investors. Now even novice investors can swap money into and out of various investments within common accounts like 401ks and IRAs. That said, even the most sophisticated self serve investor wants to speak to an insider now and again. Online advertising is taking a similar path with self serve leading the way with a the trusted advisor on standby.
Powerful post on the perceived "commodification" of media, as you so stated, but I believe your last graph says it all and says it so well.
Excellent post, and the closing two paragraphs bring it home well. There is -- as yet -- no substitute for the helpful human in B2B purchases, and there may never be. Yes we buy many goods & services online w/o the intervention of carbon lifeforms on the selling side, but even then there are times when it would be nice to have a helpful guide in the mix.
As much as I'd like to say I agree with this article, I think the reality of the situation is while there will always be ad salespeople, you might not be one of them. There are many publishing houses that have filed for bankruptcy or are on the verge of filing bankruptcy and that has led to a massive reduction of staff in all departments. Add company consolidations/mergers to the mix along with financial instability of many companies and your looking at ad salespeople taking on more territories as staffs are reduced. Advertisers have so many options now, and web-based advertising has taken a big chunk out of print. Publishing companies have done a decent job of offering web-based products, but there is always another company around the corner coming up with a better web-based idea. So while there may always be a need for salespeople, whereas a sales staff of 5-7 reps may be rduced to 3 or 4 and if you're one of the lucky ones, you'll keep your job while others around you are losing them. There's no sugar-coating what's going on in publishing and the upheaval is still going on.
Great content,
Your content applies to all sales, as it is now our job to help buyers buy, not sell them.
Mark Allen Roberts
Everyone,
Fantastic article.
Ad salespeople have nothing to fear but fear itself.
The trend towards self-service advertising is virtually unstoppable but these self service systems are mainly targeted at the millions of small and medium sized advertisers that are coming online every year. Many of whom have monthly budgets of less than a $1000.
For example, most salespeople who approach us for our off-the-shelf self-service ad manager tell us that they need our system to help them "process" more of these small advertisers in a touchless way. They don't see it as a threat. It actually complements their work nicely.
It makes sense for the publisher because they don't turn away "free money" and it makes sense for the ad sales team because you can focus on larger accounts.
As Daniel pointed out, at the top end of the scale, human assistance is there to stay.
At the other end, you can get overwhelmed by the sheer number of advertisers, the best thing to do is automate it away but still keep control.
Self service is here to stay. The generalized model worked for Google. The in-house-developed model is working for Facebook but the off-the-shelf model will work for more publishers.
Transformation is fully underway and as more things change the more they remain the same. Sales people are oftentimes the only link from past to present and can be a valuable resource to lead customers forward while reflecting on the lessons of the past. There is a saying "history does not repeat itself but oftentimes it rhymes"
Sales people will certainly have to learn more about customers businesses and as the article states "get smarter". Intellect may help understand business,empathy will help relate to people. Therefore keys to success are empathy and the willingness to win for all in an unselfish & sincere way. Businesses need to send sales people commanding the aforementioned traits to customers and customers will embrace them dearly.
Self serve ad systems are already in place and while the client convenience is there they much rather turn the driving over to trusted sales people. On the other hand there will be companies and services driving self serve systems themselves. When immediate results are reported the user will try to optimize and repeat. However there is more value in self drive ad systems than single point optimization. Many departments throughout the organization can benefit from optimization and salespeople may be the only resource to link departments together so the entire corporate eco system becomes more efficient.
Sales people are on the thresehold to penetrate further within organizations. Relationships will deepen and sales people will continue to solve problems for customers and their own organizations.
CHANGE BRINGS ABOUT PROBLEMS WHICH BRING ABOUT SOLUTIONS WHICH BRING ABOUT CHANGE ..AND REPEAT
Sales people will be in the middle of change,the middle of problems and the middle of solutions.
Ad sales people will survive --WHY Because they will sell you on the fact they should stay around---and you wont resist
Very well said. This applies especially to Small & Medium Businesses -- local advertisers who comprise 96% of all businesses out there. As one of our sales trainers, Bill Caudill, always says, "Local advertising is sold, not bought."
Yes, Daniel - this kind of service and consultation is exactly what local-direct advertisers want. The irony is that far too many media ad salespeople offer little additional value to their advertisers than their self-service online bots.
According to a November 2009 survey of 1,100 business owners commissioned by www.AdMall.com (full disclosure: a product of my company), advertisers want trusted partners who will keep them from making an expensive mistake. A 2.5-minute video providing a representative view of their comments has been posted on YouTube at http://www.youtube.com/admalltv#p/c/C2E6014BB4AFEA9C/0/7LrexqfrCPw
And to be fair, it's often not the reps fault. It starts with proper leadership.
Gordon, no. Local advertising is bought. Those small advertisers do not want to feel sold something. Salespeople show the client what is available, know what the competition does and show the client how your vehicle will be better for them in comparison or in addition. It's more like a partnership. After all, a one time buy does not a good client make.
Excellent article. I have been selling online video and have seen a lot of changes with automation as you describe. I totally agree that the relationship is critical. Although the automated sytems are out there a specialist who knows how they work will always be able to advise and be needed as many SMBs want to and perhaps should concentrate on there core business. They can get professional sales and advertising help as needed. I hope my future in sales gets even better.
There is a difference between selling impression for reach and providing a multi-plaform media plan for engagement. Talented Sr Sales person will certainly be needed in the future- the question is more for sales person in general. today people buy stock through E*Trade, book their travel with Travelocity, buy their book through Amazon etc...why would they need personal advice when they book X impression if they have access to all the relevant demographic information? When was last time you spoke to a travel agent? or to a bank clerk to get $100 cash?
This article is right on. My company trains TV Salespeople every day and we ask them to continuously Focus on CUSTOMER SUCCESS. That means they must understand the client's industry, the market conditions affecting their client, who their client's BEST customer is and how that person consumes information. Most importantly it is about activating that best customer and that takes ideas and creativity. We are not doomed! In fact, we are needed more than ever!!
If all you are selling is "spots 'n dots" then you can be replaced by a machine. If you have expertise in your field and can contribute something constructive to the conversation then you will be a valuable asset. Small and medium local advertisers are demanding tangible results from the media and delivering the number of points that were negotiated is not the tangible results a local business owner is seeking. As a media salesperson, can you offer advice on the creative? Do you have any thoughts about how the business is trying to position themselves, vis-a-vis their competitors? Do you have any suggestions for integrating online elements with the schedule? The list of possibilities is endless, as is the need...if you know something more than just how to push a button on a computer to generate a reach and frequency report. What can you bring to the table that the computer can't do (hint, it's all about imagination, ideas and the creative)? The term salesperson is probably a misnomer. You're going to have to be a marketing consultant who is comfortable talking about a wide range of media options (many of which you may represent) and, most importantly, ideas for solutions.