local media insider
Case study

How Palm Beach Post created its internal ad agency

Alisa Cromer
PBP's online media kit resides at http://realsolutions.palmbeachpost.com. Separating the marketing site from the product is a best practice, and PBP's kit is clean, simple and worth looking at.
The Wall of Fame. Girardi's office wall is covered in new client testimonials.

Site:  PalmBeachPost.com: owner, Cox Enterprises

Traffic: 37 million page views, 2.1 million UV’s

Key executives: Chuck Gerardi, Vice President of Revenue Development; Suzanne Pepper, Director of Innovative Client Solutions; Chadi Irani, Digital Sales Manager

Summary: In the fall of 2009, The Palm Beach Post decided to create an internal ad agency. Today the eight person creative team is helping sell bigger campaigns to mid to large-sized accounts. In its first quarter of operations, the "agency" conducted 55 "brain-storming sessions" for clients that resulted in 22 advertising campaigns, seven of them new, and a collective increase in revenues of 90% over prior year.

Background:   The ad agency concept grew out of a three year process of organizational change. When the economy collapsed in late 2008, many in the company were asked to reapply for a job as positions were eliminated and new ones created. The most aggressive reorganization was of the editorial and revenues departments.

All  revenues including circulation, marketing and advertising (a team of about 45 in outside sales and 5 inside) would now report to the VP of revenues, Chuck Gerardi, instead of being divided into branches that reported separately to the general manager or publisher.  

Challenge: As part of the reorganization, The Post conducted a market study with Frank Magid & Associates to find out how readers and advertisers felt about products and services that the newspaper offered. The feedback that came back was mixed: 

“(Advertisers) said...we know we need digital, but we need help... Also they said, stop pitching us products. Help us find solutions to our business challenges."  (Girardi's full summary of “what advertisers want” from the orginal survey is here). 

Gerardi and his key leadership team met over a beer in a neighborhood restaurant to discussed ideas for a new structure. They mapped out their vision of a radical new structure on paper from a core newsprint roll. 

Gerardi’s plan called for a "hybrid" sales and customer service call center, a direct sales team, digital team and a free form  client solutions area. In short, Girardi had decided to replicate  his version of an ad agency within the newspaper company.

Strategy: Instead of a more traditional hierarchy with several branches, the plan showed a ring of circles with customer and a single client "lead" in the middle who could access a variety of resources.  

A sales training and consulting firm, Center for Sales Strategies (CSS), used by Cox previously in the radio division, became heavily involved in providing the tools to repurpose the staff around new objectives. One tool was personality testing for innate talent tendencies.Taking advantage of the fact that all people in sales and sales management roles needed to reapply for jobs, Gerardi’s group could match the most talented employees with the best newly created positions. 

Gerardi also created a new department, Innovative Client Solutions, with the mission of meeting any need that advertisers might have in the marketplace. He selected Suzanne Pepper to run the new 16 person department. Just six months with the company, Pepper's “old job” in charge of the Classified vertical advertising sales department had ended almost as soon as it began. In the new position as head of Innovative Client Solutions, she was tasked with delivering solutions for “what advertisers want”.

“My charge was to take the a blank white board and turn it into something that would be responsive to clients needs. We had an ad agency strategy in mind; so that no matter what a customer needed we could help the client with it.

Three teams inside Innovative Client Solutions
The new group was intended to be “a mix of left and right brain talent,” says Pepper. The staff of 16 was divided into three groups:

•Client solutions
Client solutions  is a five person team headed by Sheryl LeGates. Besides LeGates, it includes  an analyst who creates sales presentations and two analysts who also go on calls with sales representatives and are certified in the Marketing Strategy Model, (another CSS program), an extensive formal needs analysis.  They  are usually brought in on the second sales call to conduct the templated interview with the client, which can last up to an hour and a half and define unique selling propositions and marketing objectives. LeGates is also the gatekeeper; when sale representatives who want to schedule a client appointments with an analyst, they have to give her "KMC" or the "key marketing challenge," (also part of CSS's selling system) and or go back and find it.

•Market Research 
The second team of analysts  finds leads for direct mail and special projects; essentially data-mining and qualifying leads for the sales teams and managers. 

•Creative Ideas
“Creative Ideas” is led by Sabrina Starrett, a designer who was "discovered"  in the editorial department, creating the page one lay-outs. No more. Today Sarrett's main job is to lead formal brainstorming sessions (also a skill taught by CSS) to find creative solutions to advertising challenges for major accounts, and create the ads and solutions. The team includes five designers and two copy-writers (entirely separate from the production staff). 

The team also handles all the company’s own branding and promotions, from its B2B web site, http://realsolutions.palmbeachpost.com to radio spots and television ads story boards. 

A client brain-storming session can take several hours and generate 60 to 100 ideas. They are aimed at clients who are both very engaged in marketing and have spending potential; however, the team will take on even a moderate budget with an interesting challenge. The best ideas that float to the top can support major campaigns across multi-media platforms. 

Like LeGates, Starrett is the "go to" for scheduling the sessions.The group currently conducts 15 to 20 brainstorming sessions a month – that’s about one per day, and aiming for two per day as the sales force learns how to use the new department. 

Both the "re-application" process and testing for talent were crucial to deploying Innovative Solutions. In total only one hire of the 16 was made from outside of the company.”It’s amazing to find out the talent you can unearth from within,” Girardi says. 

A new role for account executives
Account executives have also seen their job descriptions  shift.  

"There used to be the expectation that the sales person was an expert in everything. That’s just not possible any more...our asset list grows almost monthly. The new paradigm is you have to know what the tools are , ask the right questions, and then go get the help. If a clients says I need a low cost way to target, they need to know where to go to get the products that can fill that specific need.” 

Products are diverse and sophisticated, from geo- and behavioral targeting to selling social media (through a new third party partner, Ballyhoo). So in the new environment, the AE focuses in under-covering  the KMC,  or as Pepper puts it, "what keeps them up at night."  They may bring back an analyst with them to the next meeting, who conducts an extended interview, or, if the client has even more potential, engage the Creative Ideas team for a full brainstorm. 

“We built the Client Innovations area to support any question that customers might have in the field. Rather than sell products, we go out and ask questions, uncover the need and send the right person with the sales representative. It is a much longer selling cycle, but the pay-off is much bigger.” Pepper says.

The sales representative may or may not be present during lengthy brainstorming sessions, partly because of their tendency to want to speed up the process.

“We don't want the sales persons revenue and project goals getting in the way, and having them jump in too early with ... product solutions like “What about the football section?" 
A new way of looking at customer base
Only an estimated 20-25% of the customer base is ripe for either the MSM approach or a brainstorming session. The bulk of advertisers are still what Gerardi considers "transactional customers" who simply want to place an order and do not desire additional services, "because they're already sold on what we can do for them." His long term plan is to move some of these customers (the smaller ones) to a self serve platform (they are looking at vendors now) supported by a call center, while they free up sales talent to better serve mid-level customers who have more potential.

Who gets a mere "market strategy" customer versus one that gets a full brainstorming session is also more about the character of the customer than a dollar amount cut-off. 

“When you ask “who is your target customer and what is your strategic plan” many customers can't even answer that question. They really don't have a plan.Their answer may be “I just want to increase sales.” That’s a "Marketing Strategy Model" prospect customer,” Gerardi. 

The full brainstorming sessions are aimed at a mid to large companies that have a plan but want to find a “big idea”. 

“It could be moderate investment to a much larger one, the difference is the caliber of the advertiser and their situation.”

One case, for example, is Rosner's is a family-owned single location appliance store in West Palm Beach that plans to celebrate its 50 th anniversary in 2011. “They wanted fresh ideas...not more of the same blah, blah, blah dead ideas. So they came to us and said ‘we decided to give you a chance.’”

Rosner’s top executive was invited to the brainstorming session, during which the team fielded 70 to 80 ideas in the session. “He was blown away,” Gerardi says.  Rosner's  50th anniversary campaign is now under development.

The success of the Innovations area, like the agency model itself, is difficult to measure, since it’s hard to prove what the customer would have spent without the added attention and creativity. But an increasing number of large buys filtering through the division shows that the model is working. Collectively, the accounts that go through brainstorming have increased over prior year by though overall ad revenues continued to moderately decline.

Some of the dollars unleashed by this process are significant. One of the brainstorming sessions was with Wells Fargo Advisors. “Quite honestly, we botched the first brainstorm with them back in September 2009. So we brought them back for two or three additional sessions. The first piece of business they gave us was February 2010-- it took six months. But now it’s potentially a six figure account".

"Before, we would have backed off (after failing the first time). We would not never have carried that account as long as we did in the old environment, but the pay-out is much bigger.” 

The first real synopsis of revenues was taken at the end of June. Of 55 accounts that went through the brainstorming group, 22 were active in the second quarter.  Spending increasing collectively an average of 90% and a couple of the spending increases are significant. The total uplift for these accounts was $129,000 for the quarter.  

“For the first 
quarter that we measure it, that’s a good number. That could mean upwards of $500,000 for the year. That’s not where we expect to be, but not a bad effort considering we are only at a third of our capacity right now,” Gerardi says. While revenue increases are still just shy of the department costs, Gerardi stipulates that its early in the game; he expects to be doing two brainstorms a day and double the volume and results by the middle of 2011.

Another gauge of success 
is are unsolicited testimonials from the customers. There is a wall of them framed in his office. 

“Some may still wonder "why do we need so many people in non-selling functions?", but I'm convinced this department will more than pay for itself in the near future", Gerardi added.

"The number of customers coming into the Innovation group is growing, and their spending is growing as well. And they are giving us unsolicited testimonials and referring other potential customers and they're also renewing with us, all of the behaviors we want from that very small subset that is actually using these services.”

Lessons learned 

1. "Creative services are not for every account, for20-25% of our account base but have a huge potential pay-off. "

2. Being more consultative stretches out the sales cycle, which is one reason why is it resisted by sales people who are wanted immediate gratification. However, this approach gained substantial growth in incremental dollars.

3. One of the big challenges is to close the feedback loop from the sellers, so that creative teams know which accounts resulted in a sale and how the campaigns performed.

4. “There is talent at the newspaper you just need to know how to tap into it." A case for allowing people from all over the company to be tested for talents and allowed to advance between departments - especially designers trapped in volume production and natural leaders outside of management positions.

5. The sweet spot is mid-sized accounts (who are) under-spending and growing them into more robust accounts in print, digital and direct targeted products. We may only (currently) be tapping into one product line. The vision is to clear the decks to better serve the accounts with the most potential. 

Thanks to many people at PalmBeachPost.com for contributing to this study, including Chuck Girardi, VP of Revenue Development has been in newspaper sales for 30 years. He spend 19 years with Dallas Morning News, and has run  Classifiesd, Automotive, national,  retail and been general manager of the newspaper. Also a shout-out to Suzanne Pepper, Chadi Irani and Scott Lotts for sharing their expertise.

Alisa Cromer

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.


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