Ad Sales in the Sunset

By: John Fredericks

As many of the nation?s largest daily newspapers head for what looks like another collectively dismal advertising revenue performance in 2006, much has been attributed to the industry?s current state of financial woes.

The self-proclaimed “media analysts” hovering along Wall Street, buttressed by corroborating comments from several of today?s industry titans, once again bemoan perpetual falling revenues and share while attributing them to the typical bugaboos, all of which appear uncontrollable: circulation decreases, readership declines, the disappearance of the younger reader, the economy, the automotive downturn; major retail, financial and telecommunications consolidations, increased competition — you name it, they?ll excuse it.

Recent publicized comments such as “when auto comes back” or when “real estate,” “national” or “recruitment” rebounds are based on a primary fundamental flaw that links newspaper advertising revenues to outside economic forces — that are universally perceived as beyond local control.

The aforementioned realities are not the root cause or the cure for this seemingly endless decline in newspaper ad revenues. While these circumstances may have held true 30 years ago — when 90% of US markets had consolidated through acquisition and JOA to one major daily newspaper with virtually no competition — they are mere mythology today.

To survive and grow any contemporary media enterprise has to simply provide advertisers with relevance, results and a robust ROI. The media outlets that are accomplishing this are growing their business at record levels, thriving in the perceived turmoil and expanding their share of the advertising dollar.

Every major daily newspaper today offers the greatest depth of audience with the best reach for the lowest comparative investment available in their respective markets. While certainly losing significant readership from where they were 10 years ago, the flip side is the explosion of media fragmentation has actually provided them with a huge increase in relative reach.

So what?s the real problem?

Sales: sales representatives, sales approach, sales managers, sales compensation and sales talent.

The industry?s entire contemporary sales model is rooted in an intellectually corrupt 1970?s paradigm that was centered on managing down the cost of sales when the industry enjoyed a virtual media monopoly and the business simply flowed in. It has not evolved with the changing environment nor gained alignment with a dramatically altered advertising and economic landscape. The result: a continual spiral of share loss with no solution in sight (other than cost reduction, and we all know you can?t cut costs in perpetuity to reach prosperity).

The solution: internal and external sales revolution.

The fundamental sales proposition in the industry is turned upside down, causing a reverse domino effect with both the core value, branding, and marketing propositions put forth to the advertising community.

WHAT TO DO

The soul of future financial success for the industry is changing the current fundamental newspaper sales proposition from product and its relative price to the achievement of explicit customer objectives in a specific time frame with a definitive ROI — thus rendering past or current circulation fluctuations or rate increases irrelevant to the advertiser?s issues at hand.

Teaching newspaper display sales reps and their managers to take control of their customers expectations by predicting a result aligned with their campaign — in the form of a definitive deliverable to meet or close the business gap they uncovered — has proven to elevate newspapers results in the advertising communities they serve to record setting levels. Why are they immune to the same “challenges” as everyone else?

The basic advertising value proposition must change from the focus on “products?” to the power (value) of your sales team to provide their customers with compelling, relevant and effective “solutions” to their quantified objectives with a quantifiable return on their investment.

This induces a change in the branding proposition to your customers from building the brand of your “product” to building your sales organization?s collective sales brand in the eyes of your advertising community.

The marketing proposition must change from relentless attempts to build the features and advantages of your products to your sales reps relaying only the key relevant benefits that align with specific explicit needs communicated to them by their customer.

Part of the enormity of the marketing myopia that has gripped many newspaper companies today results from the same marketing executives who are focused on marketing their product (the newspaper) to the reader also produce the sales materials for the advertisers. This results in a huge relevance gap between sales rep and advertiser, further exasperating their sales brand, heightening irrelevance and depressing their ability to gain time with serious and savvy decision makers.

The sales management proposition needs to change from a relentless focus on internal demands to creating external opportunities; from explaining the past (to keep my job or CYA) to influencing the future; from managing tactics and activity to developing and leading strategy. Many newspapers so-called sales managers represent an oxymoron ? they don?t really manage sales. They manage paper, reports, and their bosses.

Sales compensation plans — developed in the ?60?s and ?70?s during the period of consolidation — are universally considered the worst in all of media by top sales reps. Based on last year’s results, often capped, with no regard for dollar one and predicated on arbitrary goals more often than not given out in the third week of the current month, they punish achievers, embrace mediocrity and repel performers. The best young sales people, once they figure out they can make considerably more money for stellar performance elsewhere, flee to competing media — often taking your customers with them.

The fixation on “competition” and “competitive media” is counter-productive, a waste of precious time and resources, and downright silly. Newspaper sales reps in today?s intense environment don?t compete with other media– they compete with other sales reps representing other media– for their customer?s time. The genesis of the advertising street battle today is not for share; share is a subset directly related to an organization?s sales reps ability to gain time with their decision makers.

From a pure econometric standpoint — when sold the right way — daily newspapers and their affiliated Internet content Web sites still represent by far the most effective and efficient buy available to virtually all advertisers in today?s markets.

Rather then wait for economic upturns and blaming failures on market fluctuations, this call for change — proven and potent where it has been implemented and embraced — puts newspaper executives in position to control their own destiny.

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