Robert Granfeldt - whose steps to due this are listed here - recently tuned us in to this 2012 "News Year's resolution" from Kirk McDonald’s January IMNA blog:
"Single-digit digital growth is a non-starter. Double-digit growth in the range of 20% won’t get you there. But 30% digital growth rates put you in the game. And 50% growth rates start to cover up (mainstream media's) revenue losses and create a bright future..."
If your company is falling behind these targets, it may be time for a digital sales makeover. Here is a summary from Granfeldt’s presentation at the American Press Insititute's December 2011 conference, along with a “back to basics” strategic worksheets attached below and explained here.
By way of background, Granfeldt moved from Morris Communications to become VP of Digital Media, Southern Community Newspapers, Inc (SCNI) in 2010. At the time the group had an average CPM of $1 to $2 , based on a sponsorship model and was due for a strategic overhaul. By the end of 2011, digital revenues were up 85% year-over-year (35% over the 50% budget). Below are Granfeldts 15 steps to create a 2012 digital turn around strategy – or to just rev up your current efforts.
1.Start by selling what you have
Crawl, walk, run. Even if your site is problematic or digital products are insufficient, begin by selling through banner ads (or streaming for radio stations) at an appropriate CPM. Banner ads sales often still lag after a variety of new products have been created, even those these ads drive significant results for advertisrs. So don’t let your sales department sell you on the idea that banner ads are not important to a merchants marketing campaign – whatever the merchant is doing digitally banner ads distribute their message to a wider, targeted audience.
2.Evaluate your site’s revenue potential
A quick, easy way to assess potential annual revenues is to simply multiply $6 (a typical industry average CPM for display sales), times the number of ad units, times page views. Note: If you have more than five ad units, you may consider reducing these to five for small sites, (under 5 million page views), or even three for very large sites. Too many units clutter the site, lower click through rates for each ad, and devalue the “share of voice” per ad unit. See Granfeldt’s standard group of ad units in the third image above right.
Four worksheets to help evaluate revenues is attached below, and fully explained here. Executives at API were often startled to see how much revenue is still on the table just from small shifts in pricing strategies and selling through their own web sites.
3.Calculate the current sell-through rate
60% is considered average for a healthy sales effort, 70% to 80% is stellar. If your site is not reaching these percentages, create substantial targets in the high double digits.
4.Calculate your site’s current average CPM.
There are two CPM’s to look for. First is the total average CPM for remnant sales, which should hover around .50 to $1. The other is the CPM of display ads sold by your team, which should be around $6 (for large buys or add-ons to large traditional buys) to $10. If you are averaging these out, you get the average CPM for the site, which should range around $5 to $6. If your CPM is too low, then focus on what pricing underpins the digital sales packages first, then on the sales strategies overall. Again, the worksheet to really explore the metrics for banner ad sales is attached below and explained here.
5.Assess the sales personnel
If this is a traditional media company, look at which reps are selling digital products and how much each brings in. Create a spreadsheet that shows how much each rep sold in traditional dollars, digital dollars, and the percentage of digital to traditional. Are there any sales people who don’t sell digital? Are there “value-add” buys on the site with no dollars attached? Which reps are selling “under value” and what is the policy for discounting banner ads? Discounting for advertisers who have strong traditional media buys is fine, as long as there is a policy that fits your site evaluation strategy. But... what percentage of total sales does each rep need to target to accomplish that 50% target? Keep in mind that a rep that brings digital sales from 5% to 10% has already created a 50% increase. These are obtainable numbers!
4.Commit to CPM based pricing – and communicate the CPM basis to the team
That is, even if the digital marketing packages are sold in bundles, or as part of sponsorships; those packages should be based on a CPM under-pinning. Typically a good price for a local site is $10 per $1000, moving towards $12 and $15 CPM for more targeted buys via channels or Yahoo behaviorial targeting. Pricing can move down to $5 or $6 CPM if there is a significant traditional buy, such as $20,000 or more for the year, or a large buy of several hundred thousand impressions. Of course video is much higher, $40 to $50 but only counts when "played."
Example: 100,000 impressions x $10 = $1000, plus 30,000 e-blast @ $400, and $6000 broadcast buy. Package is $7400, minus a 10% discount. . If the site has very high traffic, the CPM can drop to provide more value. Again - create and use these worksheets - most execs are surprised by how much money is on the table.
5.BUT... Keep pricing simple enough or sales reps to calculate pricing on the fly
Using a $10 cpm has the advantage of simplicity; the sales rep can calculate pricing on the spot without using a chart or caculator. 300,000 impressions a month for example is 10x300, or $3000. IF the discount is 30% with a Print or broadcast buy, with a $5000 minimum that is also a breeze to calculate while out on a call.
6. Review the number of ad units
Five key positions are typically ideal, especially if the site is not sold out. However if it’s a small site and sell-through is 70 to 80%, you may need to consider how to place more units without creating clutter, raise prices, review ways to increase traffic (photo galleries, improved related story widgets, and SEO are all options) or join a network such as Centro Lift (reviewed and recommended here),mentioned below, which allows you to place local buys on national sites with local audiences, and keep the mark-up. Large sites may only need three units. But avoid large numbers of ad units; too many units detrfact from CTRs from the concept of share of voice for the advertisers paying $10 to be there.
Ads below the fold are typically left for remnant space sales. If ads are grandfathered-in because of old value-add deals, try to move them below the fold positions if you can. Granfeldt recommends “sell first, fix the ad site later.” That is, create urgency by “not waiting” until every issue – including ad units - is perfect. Again, if you are serious about turning things around, start by selling what you have.
6.Don’t just rely on packaging in small monthly buys.
Think of it this way: Bundling 20,000 impressions a month for an extra $200 sounds like an easy way to sell-through the site, but really gives the advertiser just 666 impressions a day (what would a newspaper with 666 readers be worth? A radio buy? Not much!)At an average of .1% CTR, the response is not going to give the advertisers any kind of significant monthly return – and they will want to know at the end of the campaign, or before the next buy. Granfeldt recommends delivering at least a 20,000 impression buy in a day, week, or over a weekend, depending on the size of the site.
Buys of 300,000 month that yield 70,000 plus a week, 10,000 a day and 417 per hour and will show real ROI for adveritisers. A 50,000 daily buy might be ideal for a sale or event, in terms of share of voice and ROI for the client. Train reps to ask for higher investment for better ROI.
A key to reps gaining confidence to sell bigger buys or shorter blocks is to always share the CTR’s from double click or other ad serving software so reps can begin to correlate the actual number of responses - these are inquiries! - to the number of impressions, as well as to the type and value of the offer. A great topic for part of the sales meeting, and to talk about what is a conversion. (Hint: what you and the client agree will be counted, with the metrics in place to measure it). This also requires great ads and offers, so see #11.
7.Back to the future: Retrain to “block and tackle”’
If the sales department is not being run against basic sales metrics – calls, presentations, sales per week, then any digital sales drive is doomed to stall out. Granfeldt recommends recruiting all the time, testing sales employees and reminds sales managers to “focus like a lazor” on digital growth.
8. Sales organization structure
There are a number of ways to structure the sales department to ensure that digital selling is prioritized. Best practice in the local media today usually includes a multi-media sales force (everyone sells digital and has digital goals), aided by digital specialists (a ratio of one to four to one to ten is typical) with one or more additional pure “digital sellers” who go after new accounts – or those which have not run in , say, two years and sell other services. If your department has not invested in this quality of digital personnel with a significant degree of separation, chances of gaining real traction on a par with top companies – and the progress of advertisers into digital – is negligible.
First image above right is Granfeldt personnel chart, its not the only solution , but a good basic place to start and a model used by the most successful digital sales companies across the country.
9.Utilize the sales meeting
Just as sales against goal are reviewed weekly so should the sales against digital targets be reviewed at the same time. New contracts rewarded should include a digital component. Train on the value of the digital audience, on presenting digital on every sales call and on digital inquiries from ads currently running. Which are doing well and why? What types of programs benefit from large audience buys?
10.When sales fall short of goal, have a digital – not just print or broadcast strategy – to make up the shortage.
In an ideal world, creating special section or remnant sale on the fly would be replaced by agency-style selling that more than makes up for the loss of these “one-offs.” Till then, local media need more ways to sell digital remnant space to make the sales goal in a pinch. Is there a plan for a digital upsell, such as video to advertisers in the directory, at a discounted price; or for a video guide or short term a “killer package” that includes digital ad impressions? Sell the next 300,000 impressions at half off till the end of the month? What about including email and Facebook posts?
10. Consider using the Blinder Group
To spark off the effort at SCN, Granfeldt hired the Blinder group to create a digital package (CPM-based) sales drive that generated $200,000. Blinder group has a stellar track record of creating packages, training sessions and assisting on sales that kick-off new products or energize the sales effort. If yours needs a boost this is a serious option to consider. Granfeldt also reported 100% retention for those sales at the time of the API conference.
11. Train on creating better ads and offers, and make it participatory, but mandatory
Digital banner ads are not a good media for brand ads. Every ad should have an offer (see lists of ways to create great offers on this site here) and promotions. Your reps need a simple way to create a landing page that goes with the offer “on the fly”. A landing page could simply be a coupon on a diectory page or coupon site if you have one, or an offer the advertiser is already running on its own site or on Facebook. Change every nine days or when the CTR begins to lag. Train reps to a/b test offers – that is you can require two banner ads for every client that is running longer term - and then optimize for the best ads and best areas of site, mid-way through. Great way to impress the client!
12. Build the product wheel
Many new marketing products on are easy to execute (see resources below). Granfeldts’ prouct wheel includes rich media ads, contests, vertical solutions, mobile and email marketing . Please see images or products wheels to the right. Create your own using the sample similar to image above right.
11.Use “smart bundles”
Make sure sales reps complete a full question-based interview, then propose what the advertisers need and want, rather than push a preset digital product that may not fit. Like the old fire sales of print special sections, its easy to force the wrong digital buys on merchants, but harder to get them back the next time. Bundles should integrate well, be flexible for small and large buys and sufficient to deliver the returns merchants expect. For example, an SMS package should include a minimum amount of advertising and an eblast to help build the clients opt-in list all year. And event should have a larger buy in a shorter cycle.
13. Sell local audiences on national sites
A number of ad networks allow ad reps to to sell the local audiences on national sites such as Pandora, ESPN or the Discovery Channel. For narrow, closely defined verticals, such as homebuyers age 50 plus, or sports fans age 18 to 34, these buys are an ideal method of gaining more market share per customer – as well as creating your customers’ success. When your site runs out of inventory without completing the RFP, or say, for a movie that wants all your inventory from Wedneday to Friday, these networks are ideal. One that offers the capability of buying across a variety of premium national sites, is Centro Lift (recommended here in fall 2011 and exclusive by DMA). Southern Community Newspapers calls their program BOLT and has generated six figures in revenues in the first six months, expecting to triple that in 2012.
14.Shorten the billing cycle
It sounds basic and it is, but some local media companies place digital orders for the next month, bill at the end of the month and then wait another 30 days. Ads can be billed with the same immediacy as print as, that is the bill goes out as the order is placed and is due when the order is fulfilled.
15. Execute with Urgency
There is no substitute for leadership in times of change. Sales managers need to walk the talk with urgency and enthusiasm. Set the tone and stay on msessage about what will be evaluated and rewarded on a daily basis. “Focus like a lazor” is the new sales mantra for shifting advertisers focus from legacy media to digital solutions. Granfeldt himself is no geek, just a dynamic, high integrity and believable leader you want to follow up the hill. If you have one of these managers get behind them!
Many thanks to Robert Granfeldt, VP of Digital Media for Southern Community Newspapers in Lawrenceville, Georgia, for his “Block and Tackling” digital presentation and help with creating the digital strategy worksheet attached.
Selling onto national sites with local audiences: Centrolift.com, contact firstname.lastname@example.org. Other LMI members have also recommended Collective.com for companies such as radio or broadcast, who do not qualify for Centrolift, which has a preference for newspaper organizations and is exclusive by DMA.
The author, Alisa Cromer is publisher of a variety of online media, including LocalMediaInsider and MediaExecsTech, developed while on a fellowship with the Reynolds Journalism Institute and which has evolved into a leading marketing company for media technology start-ups. In 2017 she founded Worldstir.com, an online magazine, to showcases perspectives from around the world on new topic each month, translated from and to the top five languages in the world.
No comments on this item Please log in to comment by clicking here