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Re: AM: Advertising sales channels, broadly defined

Subject:     Re: AM: Advertising sales channels, broadly defined
From:     Dorf321 <>
Date:     Wed, 29 Apr 1998 13:00:26 EDT

In a message dated 4/23/98 3:35:24 PM Eastern Daylight Time,

<< Mitch and I were discussing ad sales efforts this morning at Coffee and
 Doughnets, and the topics we were covering sounded like they would make an
 interesting thread here - so I will kick it off. >>

After spending over a decade in sales and marketing in the broadcast arena,
and now for the past year developing sponsored content for Digital City/AOL,
my attitude about Frank's question is the same in regards to protecting and
placing a value on one's inventory.

I'm not convinced at this point about putting your inventory up on an auction
block.  A couple reasons for this; (1) it devalues your inventory and makes a
statement that you can't move your inventory unless it's a distress sale, (2)
it's a sign of desperation on the publishers part in a public showcase.

I prefer to make deals with specific companies that are looking for bottom
pricing that you have a personal arrangement with that is in effect kept
"secret" to the public media community.  If a publisher is in dire straits for
the revenue, this is still a way of bringing it in  without informing the
buying community that your inventory isn't moving.

Personally, I prefer to show "value" to inventory and suggest (1) using your
unsold inventory as "testing" opportunities.  I didn't have this philosopshy
when I managed a radio station, but the online medium is still very new and
unproven.  I would suggest the following;

a)  use it for "bonus" space (added value).  let your paying clients know that
you appreciate their business and since you had some additional inventory you
wanted them to benefit by it.  This goes a long way and is good client

b)  use it for a potential customer that you haven't been able to convince
yet.  Offer a short term trial (long enough to measure whatever objectives you
agree to) and build an agreement that based on this free introductory offer,
if you reach the objectives both parties agree on, then they will commit to a
paid schedule.

The other suggestion is to use it to promote public service (goodwill) and
choose groups that you are passionate about and want to help.  Digital City
hasn't done this as an inventory filler, but I think there might be some tax
advantage (talk to an accountant) since the online community is not regulated
by the FCC.  You might be able to write off the value (top of your rate card)
of the inventory that you donate.

Personally, I think we all need to be able to tout our medium as one that
"works."  I think everyone will agree that it's excellent for branding, but
branding only works for major co's buying network product.  For sites that are
more niche, the client is going to want direct response.

Nobody has figured out the golden formula to successful campaigns yet.  Going
beyond strong creative (catchy banners that entice a click-through), there are
certain products and services that are working and others that don't.  One
must remember that the dominant user of the Internet is the 18-34 year old who
is more web savvy and more comfortable with new applications.  So a Mercedes
Dealer probably isn't the best candidate to drive results home for, but Honda
and Saturn are.

My point is we all have to empower this medium and be convincing and believe
through testimonials and results we see.  Using unsold inventory allows us to
experiment and right now experimenting is very important.

Regarding rep firms, banner networks and in-house sales.  Certainly in-house
sales are the best way to go if you can afford the staff.  In-house sales
executives are focused on your product only.  Rep firms can be very good, but
it boils down to how knowledgeable they are of your product (meaning that you
have to manage them also and keep them up-to-date with information and the
needed tools to sell your product).  You also want to be the "squeaky wheel"
since they have other sites that they represent and their objective is to make
sales and typically it doesn't matter to them which sites sell as long as they
hit their numbers.  

When interviewing a rep firm, I would try to get them to give you a figure
which they feel they can sell that they feel comfortable with and hold them to
it.  If they don't acheive those numbers have a clause in your agreement that
you can go elsewhere.  It's helpful to offer them exclusivity.  Also, give
them incentives to make budget and exceed just as you would with an in-house
sales staff with additional commissions, merchandise, trips, etc.

I'm not a user of banner networks so I can't give you a personal opinion about
them.  I think this avenue is more for bringing new traffic to your site which
is certainly very important since you're selling off of numbers of visitors
and usage.  If you don't have a promotion department or person, I would think
this could be attractive.

All in all, whichever way a publisher decides to go, it's a matter of offering
real value to advertisers.  Each site is narrowcasting, and different
campaigns will not all work the same.  Right now inventory is fairly
plentiful, but remember it's a commodity and you want to build its value and
protect it.  If you start off just "giving" it away cheap, it's much more
difficult building up to the level it is worth.

Mark N. Dorf
Digital City, Inc.
(703) 918-1872

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