local media insider

Lots of models but only two basic metrics

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I've been finding it helpful with clients and members to divide the kinds of revenue available - and their assets - into two buckets: Those driven by traffic and those driven by sales.

That is building the Total Digital Audience: Email, mobile, online, Facebook and so on - drives a number of products from deals to transactional revenues of all kinds (selling photos on galleries for example). So the plan to build these audiences is critical and a revenue driver. When you think of all these models - from Taboola, which gives extra money for related video - to PrLink, a much under-deployed paid press release site, it's clear why the company with the most data wins and why "marketing" is becoming a revenue position, not merely an excersize in brand extention.

Now let's look at the second metrics: Direct sales. Everything driven by direct sales is determined by revenue per sales rep. Now we are looking at products, and sales organization and quality of leadership. However, I've met many organizations in which the revenue that current reps bring into the company - say $500,000 or more - can't be replicated via selling new products. Our mantra here is that as long as a rep can bring in $200,000 in contract revenue first year, and there is the cash flow and management to sustain this, you can hire reps against all kinds of new products that may otherwise not get enough traction to be viable.

Of course traffic-driven revenues and direct sales driven revenues are closely intertwined and often involve trade offs. However, I hope thinking in these terms makes planning your 2012 business models a little easier to create, if not to explain in your company.

On a final note, my last speaking engagement of the year was at what it looks like may be American Press Institute's last seminar in its current form. It was my first, but many of our members cut their publsihing teeth on training from API. The group was small - we all went to dinner together at the same table - but left with a great set of practical insights and "to do" lists, some of which I will be sharing with you next week. Many thanks to Mary Peskin and her staff for a great job with this.

Also thanks this week to Robert Granfeldt who shook up some of the publishers in the room by sharing his site evaluation tools - lots of money still on the table! His 15 tips are the first case study of 2012 and the tool set is here.

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