After years of steady, double digit growth in digital, what is it we’re doing that suddenly jumped digital revenue by 200%?
Wondering why you can’t seem to get traction in digital sales at your TV station? I’ve got the answer. You’re doing it wrong.
Like me, you are probably constantly bombarded by those reports talking about the incredible amount of digital spending happening in your local market. You may be feeling pressure from your boss, or your company, regularly asking why you’re not getting more of those dollars.
I’m not trying to be flippant, but if you are struggling to put up digital dollars by selling your branded products, good luck. While there’s value – and a market – for those products, they can’t be your total focus. Here’s why.
Borrell calls it the marketing iceberg
Spending on digital advertising is the part of the iceberg above the waterline. You know, the smallest part of an iceberg? It represents 17.6% of the digital spend. Where’s the rest of the money going? Digital support, promotions, and offline support. The stuff most of us haven’t been selling.
To make matters worse, 86.4% of the spending is by large companies – the type of companies that buy national or regional advertising. The SMBs (Small-to-Medium sized businesses) are our sweet spot. We generally do best with local business and have the most flexibility in structuring advertising campaigns. But they only account for 13.6% of the digital ad spend.
And then there’s this. In Q1 2016, 85 cents of every new dollar spent in online advertising went to Google or Facebook according to Brian Nowak at Morgan Stanley.
So let’s do the math.
17.6% of digital spend is advertising. Of the advertising, 13.6% comes from SMBs. And of the digital spend, only 15% doesn’t go into Google or Facebook’s pocket. That means all of our digital sales efforts are going after less-than-half-of-one-percent of the money people are spending on digital.
If that’s not bad enough, there is tremendous competition for that 0.4% – not just from other local media companies and agencies, but national and regional companies as well.
No wonder some media companies are struggling to gain traction.
So how have we changed the paradigm? Simple. We’re going after the other 99.6%.
OK, really not so simple. Building websites takes a whole different skill set and brings its own set of challenges. Selling digital ad networks, Facebook ads, and Google ads means a much thinner margin than we’d like. Working with third-party vendors means a higher cost and a layer of management to oversee the relationships. Things like SEO, SEM, re-targeting, geo-fencing and geo-conquesting can be difficult things for legacy sales people to wrap their arms around.
And then there’s optimization to make sure the products we’re selling are performing at peak, which takes sales support a lot of media companies don’t typically have in-house.
Trying to hire people who can do all the things clients want is a losing proposition – unless you want to go out and buy a company that does these things. About the time you find the technical people with those skills, the market has shifted and they may not have the skill set you need.
The competition is intense. While you may have the local contacts, can you compete with the national companies – sometimes selling the exact same product – that can brag about the 100 people they have dedicated to this single product line?
The upside is untapped potential. These are companies you probably have never approached about advertising. And if you sell these services, you build a longer-term, deeper business relationship that’s not about “did anybody see my ad?” It’s easy for companies to slash their ad budget when times get tight, but are they going to shut down their website? And once they buy in, there’s recurring revenue which is a revenue category few media companies have gain foothold. There’s a monthly fee attached to maintaining the service you sold. How beautiful is that?
So how do you do it? It still comes down to the four most basic things that every great sales organization has to do to be successful:
- The right team
- The right products
- The right training
- The right systems
I know what you’re saying. Duh. But sometimes it is going back-to-basics, but with a different perspective and open mind. Do you really have the right product mix? I’ll bet you’ve had a lot of training on selling digital, but have you trained on the specific products your customers really want. And even if you’ve done that, do you really have a sales systems that drives sales?
I’m telling you right now – you’re leaving a lot of money on the table if you’re not going after digital services as YOUR PRIMARY DIGITAL FOCUS.
If you want to get into the details, drop me a note and we’ll talk.
Dughi is the VP/General Manager at WAAY-TV (ABC) in Huntsville, Alabama and founder of AudiencePop, a digital services agency. He previously worked as President of Cowles California Media, overseeing six television stations affiliated with CBS, FOX, CW and Telemundo and C2, a digital agency in California, Washington, Idaho, and Oregon.