NewBizNews: What ad sales people hear

Recently, at CUNY, we held a roundtable for ad sales people from hyperlocal blogs to big newspapers to hear what they are hearing from local merchants. We’re wrapping up our research for the New Business Models for News Project — indeed, it was Alberto Ibargüen, head of the Knight Foundation that funded this work, who said he really wanted to hear sales people’s perspective — and beginning research for Carnegie-funded work on new ad models, products, service, and sales methods, working with The New York Times on The Local. Some of what we learned; the first four are the most important to me:

* Most important, I think, is that we won’t be selling media to merchants — banners ‘n’ buttons — so much as we will be selling service: helping them with all their digital needs, including optimizing them in Google and Yelp and social media and mobile. I’ll write a post with more thoughts on this shortly.

* Voice matters. Local bloggers said they are must-reads because of their voice in the community (the human voice of the neighbor over the cold voice of the institution) and that — along with a constant flow of posts and news and the audience and conversation that attracts — makes them must-buys for advertisers. One blogger made the newspapers visibly jealous reporting that advertisers are coming to the blog asking to advertise because they had to be there. Another way to look at this: The service must be part of the community. One of the bloggers covers new businesses in town because that’s news; ads may follow but even if they don’t, the site will cover commerce in the community.

* There is interest in network sales. One newspaper exec in the room said she’s jealous of the new advertisers smaller bloggers get and would be interesting in having those bloggers sell into her site. The blogger is also interested in getting revenue from larger advertisers via the newspaper’s sales. That networked approach is key to the optimization of value we projected in our new business models for the local news ecosystem: the advertiser can be better served by appearing in more services with easier purchase; the large site can get new customers it could not otherwise afford to sell; the small site can get large advertisers it could not otherwise attract; all ships rise on this tide. (However, we must find a new word instead of “network,” as it has low-value cooties associated with it. Alliance? Ecosystem? Suggestions?)

* We at CUNY are going to be investigating the possibilities for citizen sales — new sales forces and new sales businesses that can sprout up alongside and help support the new news businesses. The group saw potential here but also saw the need for training and quality control.

* It’s clear that local merchants still need education. In the early days of the web, we had to sell advertisers not just on the value of our sites but on the value of the internet itself. That effort continues with smaller advertisers. That means that there’s a greater cost of sales. It also means that this is a means of sales — come to our internet seminar (a technique that is working for various of the participants). And I see a role here for organizations such as universities (not to mention chambers of commerce) to help local merchants understand the value of the internet.

* Local ad agencies also need education still.

* There was some debate about the sophistication of local advertisers and their need for data, but it’s clear that in many cases, media have to collect, analyze, and present data on performance and return on investment. One of the more established companies said all that matters to small advertisers is ROI (return on investment: feet to the door and ringing cash registers). One of the newer companies said more data is needed to prove performance and value. In some cases, we will measure will be attention, in others leads produced, in others sales, and in others more intangible measurements about community and relationships. At our conference on new business models for news in the fall, Gannett talked about research it did with Ideo that found that very local merchants need discovery (read: search) but in many cases, their customers already now they’re there; so what they seek is better relationships with their communities; how do we deliver and measure that?

* The simpler the better. Local merchants are not buying CPM-based advertising. They’re buying timed sponsorships. They want to see the ad they bought on the site.

* Google is playing a bigger and bigger role in local (via the web and now mobile). Some local merchants don’t bother having a site; their ads link to their Google place page.

* One old law of sales is still true: get one butcher advertising and that helps force the next one to join in.

* Self-serve platforms for buying advertising are not the answer. Sales is still needed. I’ve heard that in more than one horror story about low revenue from build-it-and-they-will-come efforts. Once an advertiser is sold, I’ve also heard of success in enabling them to update their ads (e.g., providing them with advertiser blogs).

* Replicating print ads online doesn’t work for advertisers or readers. No surprise there; the only surprise is that publications and merchants still try.

* There are other products besides advertising to sell: email, events, coupons (which work well for many local sites). There was some debate in the group about the value of video as a vehicle for advertising and as a form of advertising itself. More experimentation is needed.

At CUNY, our next step will be performing research with local advertisers/merchants. Then we’ll work on R&D on new ad forms. Then we’ll try to train citizen sales forces. This is the next step in our work on new business models and sustainability for news. Stay tuned.

: LATER: In the comments, Dave Chase of SunValleyOnline adds great notes:

Great observations and consistent with what I have heard/seen from working with lots of local advertisers at SunValleyOnline which is one of the sites talked about in the CUNY “census” you guys did that has managed to build a reasonable (and profitable business). I generally agree with what you’ve laid out but will amplify or differ with a few items.

1. Education: Hands down the biggest need I’ve seen. Sales people need it. Merchants need it. Local agencies/marketing consultants need it. Citizen ad sales will really need it. It’s the reason I collaborated with a former colleague to create a how-to resource for local merchants on marketing in the digital age that I’m making available to the ventures I’m involved with. I believe there’s scalable ways for local sites to tap into this without having to do all the training themselves that can also serve as lead generation.

2. Tools for advertisers to manage their own ads: Despite having two tools (Impact Engine and Mixpo) that have very easy interfaces and through much encouragement, virtually no advertiser is taking advantage of it. They simply want us to take care of it. The advertisers I’ve worked with aren’t sophisticated at all from a marketing perspective.

3. VideoAds: This is primarily a function of the size of advertiser you are going after and where they’ve advertised. Generally, it’s the bigger advertiser who has run TV ads before that will be candidates to move $$. Turns out one of the categories where $$ are finally starting to move is political ads. The recent Supreme Court decision will accelerate that. Dynamically built videoads is a particularly promising area and is something that took place in the recent Massachusetts Senate race (on the winning side). There’s some powerful tools that allow A-B testing, message optimization, etc. that are accessible even to the smallest advertiser.

: And Max Kalehoff says it well in the comments: “Sell the outcome.”

  • http://www.judysims.com Judy Sims

    Jeff, I’m so glad that you are talking to advertisers. It is a vital step in developing the new business model for news, and one that is all too often ignored.

    I think there is additional value to meeting with advertisers in different categories on a one-on-one basis in their own environment. Restaurants will have different needs than furniture retailers.

    Through these conversations, the path forward will become more apparent.

  • http://www.sunvalleyonline.com Dave Chase

    Great observations and consistent with what I have heard/seen from working with lots of local advertisers at SunValleyOnline which is one of the sites talked about in the CUNY “census” you guys did that has managed to build a reasonable (and profitable business). I generally agree with what you’ve laid out but will amplify or differ with a few items.
    1. Education: Hands down the biggest need I’ve seen. Sales people need it. Merchants need it. Local agencies/marketing consultants need it. Citizen ad sales will really need it. It’s the reason I collaborated with a former colleague to create a how-to resource for local merchants on marketing in the digital age that I’m making available to the ventures I’m involved with. I believe there’s scalable ways for local sites to tap into this without having to do all the training themselves that can also serve as lead generation.
    2. Tools for advertisers to manage their own ads: Despite having two tools (Impact Engine and Mixpo) that have very easy interfaces and through much encouragement, virtually no advertiser is taking advantage of it. They simply want us to take care of it. The advertisers I’ve worked with aren’t sophisticated at all from a marketing perspective.
    3. VideoAds: This is primarily a function of the size of advertiser you are going after and where they’ve advertised. Generally, it’s the bigger advertiser who has run TV ads before that will be candidates to move $$. Turns out one of the categories where $$ are finally starting to move is political ads. The recent Supreme Court decision will accelerate that. Dynamically built videoads is a particularly promising area and is something that took place in the recent Massachusetts Senate race (on the winning side). There’s some powerful tools that allow A-B testing, message optimization, etc. that are accessible even to the smallest advertiser.

  • http://www.knightfoundation.org Eric Newton

    This approach sounds a lot to me like the Yahoo! project with many hundreds of newspapers. Helping newspapers sell service to local merchants, helping them into cyberspace.

    • http://www.buzzmachine.com Jeff Jarvis

      Yes, I think that’s part of it. What we heard is that such networks can reach down to more local levels: just as the paper can sell into Yahoo, the local blog can sell into the paper (and into Yahoo?) and vice versa.

  • http://www.attentionmax.com Max Kalehoff

    Indeed, there are various sorts of local advertisers: to simplify, let’s say national brands, regional and local businesses. They all have different goals and levels of sophistication, but one this is true: the closer you get to smaller and local businesses, the less patience and understanding business owners have for advertising. They need to run their businesses, not geek out on advertising. While they don’t necessarily care about advertising, there’s one thing they really do care about: getting more customers. It’s that simple and local media organizations need to not only provide that service, but sell the outcome. That’s a different business than what most local media businesses are in today, but it’s one most will need to get into. Small and regional businesses (approximately) represent a good half of our economy and ad spend, so this need to deliver new customers and outcome is not trivial.

    Conversely, national brands that advertise locally have different objectives. And far more often than smaller, local businesses, they’ll have interest in more conventional (and softer) advertising offerings that media salespeople have long sold, like reach, frequency, demos, etc.

    • http://www.buzzmachine.com Jeff Jarvis

      Well said, Max: “sell the outcome.”

    • http://www.sunvalleyonline.com Dave Chase

      It’s one of the reasons why things like Groupon are doing so well. They are “selling the outcome” – well said. In an earlier post Jeff spoke to the Telegraph and Burda (?) doing direct sales. One way to overcome the lack of sophistication of local advertisers is to remove ALL complexity. Handing them a customer/sale does that.

      Jeff – In your latest Twig you made a passing reference to retailers as media companies. It would be great for you to expand on that. I wasn’t thinking about retailers specifically but I keynoted an event in Memphis about 9 months ago where I posited “We’re all Publishers Now” (audience was mainly marketing execs of mid-sized companies). It’s one area of “education” I referenced in my earlier comment that a local publisher is really well positioned to share expertise – i.e., how a merchant can think like a publisher.

  • http://www.thehyperlocalist.com Jennifer Deseo

    Last fall, I attended CUNY’s meeting on new business models and very quickly grew frustrated with one speaker’s suggestions on ad design. Media-rich ads were most successful, he said. But what mom-and-pop local business can afford that?

    Thank you for this post, and for outlining the distinct needs of hyperlocal businesses (and the hyperlocal publications that hope to serve them).

    • http://www.sunvalleyonline.com Dave Chase

      Jennifer – We are doing just that at http://www.SunValleyOnline.com with mom & pops. We mainly use Mixpo which is a very cheap & easy way to create videoads (often slideshows). The catch is we end up doing the ad creation for them as they are too swamped and want us to take it on. We are able to charge a nice premium over standard ads for these rich media ads. Fyi, we also use Impact Engine which also creates Flash ads built off templates. One of the nice things is both Impact Engine and Mixpo demo extremely well. I strongly advise giving whoever is doing the sell a wireless card so they can bring their laptop with them. Mixpo works even better as you go to larger advertisers (though I’m still talking tiny advertisers by Mad Ave standards).

      • http://www.thehyperlocalist.com Jennifer Deseo

        Thanks! Will look into that.

  • Elaine

    Wading into the lion’s den here, I know, but this sounds a lot like Clayton Christensen’s idea of “jobs to be done,” included in the original <a href="http://www.newspapernext.org/2008/03/newspaper_next_20.htm#report&quot;.Newspaper Next reports. Many of the same solutions were enumerated there as well. [Disclosure: I’m employed by Newspaper Next’s parent organization, the American Press Institute.]

  • http://impactnews.com John P Garrett

    The problem with the current news model isnt that we need to blow it up and depend on bloggers to produce news. It is that for the last 10 years our wonderful newspapers have become more and more irrelevant to the reader and have raised their prices along with their content cuts. Why arent the editorial departments looking at themselves in the mirror and blaming their writing? Its about relevant content and distribution. Plain and simple – and the news media and the egos that go with the old school journalists have done everything they can in the last decade to defeat both of those important foundations of journalism. Its not the fact that the content is printed. Do all the roundtables you want. If newspapers would go back to the basics (content and distribution) they would get the advertisers back in droves. If the Huffington Post with its 9 million unique visitors cant make a profit then neither will any of your panelists. Best intentions I know – but the online model doesnt work. The power of the press is the press.

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  • http://www.jaycleon.com Jay Leon

    Buyer beware is different when you are your own salesperson. When an advertiser signs up for advertising by filling out a form on the web — the buyer is acting as the buyer and the salesperson. Any promises the salesperson would ordinarily make during the sales process are removed. And the promise of value becomes implicit. If no value is delivered, the joke is on the buyer–and the buyer will likely accept that the mistake was theirs.

    The process of selling does add value, including delivering the education piece referenced above during the sales process, along with explicit promises for performance. Executed well, the outcome for the advertiser will be much better.

  • http://www.waleshome.org Duncan Higgitt

    Only a tangent connection, but you might be interested in the views of a journalism student just about to enter the industry in the UK: http://waleshome.org/2010/02/journalism-from-the-bottom-rung/

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