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Selling Ad Inventory

Q2: What are the best ways to sell leftover ad inventory?

    Mark Dorf, who has spent over a decade in sales and marketing in the broadcast arena, and now works developing sponsored content for Digital City/AOL, believes in protecting and placing a value on one's ad inventory. He’s not convinced about putting your leftover inventory up on an auction block, because (1) it devalues your inventory, and (2) it's a sign of desperation on the publishers part in a public showcase.

    Instead, Dorf prefers to make deals with companies that are looking for low pricing. You form a personal arrangement with them and keep the ad pricing secret from the public media community. In this way, you bring in revenue without informing the buying community that your inventory isn't moving.

    Dorf prefers to show "value" to inventory and suggests using your unsold inventory for "testing". Because the online medium is fairly new and unproven, he suggests the following:

      a) use ad inventory 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 service.

      b) use ad inventory 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 based on this free introductory offer. If you reach the objectives both parties agree on, then they will commit to a paid schedule.

      c) use ad inventory to promote public service (goodwill) and choose groups that you are passionate about and want to help. 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.

    Dorf believes that, "Using unsold inventory this way allows us to experiment and right now experimenting is very important. We all need to be able to tout our medium as one that works."

    Dorf explains that, "Nobody has figured out the golden formula to successful ad 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 aren’t. One must remember that the dominant user of the Internet is the 18-34 year old who is Web savvy and comfortable with new applications. So a Mercedes Dealer probably isn't the best candidate to drive results, but Honda and Saturn might be.

    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 and keep them up-to-date with information and the needed tools to sell your product). You also need to be the "squeaky wheel" since they have other sites that they represent. 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, try to get them to nail down a figure which they feel they can attain, and hold them to it. Put a clause in your agreement that you can go elsewhere if they don't achieve those numbers. It's helpful to offer them exclusivity. Also, give them incentives to make quota and exceed just as you would with an in-house sales staff.

    "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,]

See also: Ad Sales Channels  

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