5 Hard Truths For CEOs When Entering The Digital Ad Business

Being a digital publisher was never easy.

For years, the battle for many sites has been focused on trying to snag as much of the ad pie that Google and Facebook don’t touch. More recently, the business has only become more challenging as media companies grapple with regulation and rapidly evolving customer habits — and an economy rocked by a pandemic.

Naturally, every digital publisher is racing to diversify, to add on as many revenue streams as possible. This is a sound strategy, but again, none of it is easy.

Here are things you need to know to get the most out of your site’s revenue strategies and potential.

Be realistic about your direct sales revenue timing.

Hiring a well-connected CRO is powerful. But it isn’t going to magically make revenue appear overnight. I’ve worked with a wide range of publishers and advertisers over the years, and one of the great misconceptions I face is a belief that success in advertising sales is just a matter of tapping into a strong Rolodex.



While it’s true this industry still thrives on relationships, the days when a company could simply install a sales exec with a vast network, have him host a happy hour for a few of his buddies, call a few other friends and suddenly land insertion orders on half a dozen media plans are long gone — if they ever even existed at all.

Perhaps in the heyday of Big Media, sales leaders could rely on convincing their colleagues in the agency world to throw them some discretionary budgets to help them make numbers as needed — but digital media, and the overall industry today simply doesn’t work that way. 

Be realistic about where your brand is today.

If your media property is relatively new, or sits in an emerging (i.e. less proven) category, landing ad sales deals is a much tougher, longer process. A great sales person with strong relationships can open doors and land relevant meetings, but that’s just the start of the process. It’s called selling for a reason, after all. In my experience, many CEOs or entrepreneurs think they’ll skip past that process because they have the best product since sliced bread, and clients have budgets that are overflowing.

The thing is, marketers need to get to know a company, understand its audience, its value proposition, its place in the market — before they would consider running a test. And that’s if the timing and budgets even line up.

Ad buyers work on their clients timelines — not yours.

The average media agency assigned to a handful of top accounts is used to operating on predictable cycles and can’t, and don’t, take whims. Budgets are planned and released at specific times of the year. And when they are, new publishers and technology companies typically need to get in line. The pandemic has changed some of this, but it hasn't changed the fact that agencies are risk-adverse. They are skeptical because they represent their clients, whose every penny is scrutinized. That’s why many are attracted to the precision and efficiency promised by programmatic advertising.

Programmatic ad demand is valuable, but it is far from turn key.

Yes, there are many avenues for publishers to plug in and receive instant demand from the programmatic ad marketplace — from using supply-side platforms to installing header bidding technology to extracting more value from key users to setting up private exchanges. The thing to realize is that none of these options are "plug and play" — and many have little in common with your direct sales teams day-to-day work.

Making programmatic revenue requires a tremendous amount of diligence, as well as specific talent, which isn’t easy to find. Plus, many brands want to use their own data to target customers on your site, which can command high prices — yet often carries back-end problems, like discrepancies and measurement issues. It can be lucrative, however, but also quite volatile. That’s why so many publishers have turned to installing a subscription business and ecommerce.

Ecommerce is crowded and getting more difficult. Not only are many consumers tightening their belts during a recession, but the way that publishers can track and gain credit for sales that occur on their site are getting squeezed by giants like Apple and Google. Simply put, the average publisher doesn’t have a lot of control over this kind of affiliate business, since it’s not their core competency.

Subscriptions, on the other hand, provide publishers with a direct relationship with readers, one where a data exchange is more welcome. But in this era, subscription fatigue is real and growing. Publishers must be able to prove every day their content is unique, valuable, exclusive and worth paying for.

Monetizing your site sounds easy doesn’t it? Just call your friend at a client directly and they’ll send you a check for $250,000 the next day because you spent a weekend at your company’s Hampton’s House in 2013.

It’s a piece of cake.

1 comment about "5 Hard Truths For CEOs When Entering The Digital Ad Business".
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  1. Ari Rosenberg from Performance Pricing Holdings, LLC, July 29, 2020 at 10:05 a.m.

    So glad I caught this column -- the second you start reading it you realize it was written by someone in the the business of selling ads not someone commenting on the industry from 40,000 feet.  Great stuff all 100% on point. 

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