A number of practices help make sales operations more efficient. These include: creating a rate structure that will generate the sales revenue needed to support the organization, developing a rate card, encouraging longterm contracts, and following routines that assure enough sales prospects are in the pipeline.
Stick With A Rate Structure
Nearly all of the sites in the study had a rate structure that was explained in a rate card or media kit they could share with advertisers.
Kim Clark of Noozhawk, said a well thought out rate structure is essential to a successful operation.
With a structure, the sales rep has something to share with potential advertisers and set the value of the site. Without a rate structure, “everything is up for negotiation,” Clark said, which is time consuming and makes it harder to track and hit revenue targets.
Clark said the rates have to reflect revenue needs of the site. “You have to stick with an average rate that’s going to get you into the black. Sure, it’s great if you’re making a lot of sales. But at end of the day what does your profit margin look like?”
Goals for the sales reps should be based on the organization’s overall revenue targets. For example, Noozhawk tracks monthly sales year to year and uses the data to set goals for each month, Clark said. A monthly sales goal is typically the amount sold that month a year earlier plus a percentage for growth. The percentage increase for slower months may be smaller than for high-sales months. This gives the sales person or people their targets going into each month.
In recent years, many journalist-led news startups followed a trajectory that starts with a fairly unstructured approach to the business side and ad sales and then becomes more formal.
Noozhawk made the transition from an ad hoc approach to a structured one in 2013, when it brought in Clark, who had experience with online ad sales with a local daily newspaper. Noozhawk had attracted investors who made a condition that the site bring in a partner to develop the business side.
Bill Macfadyen, who founded Noozhawk in 2007, said the site ignored “organization and strategy in the early days in favor of volume and chaos.” Noozhawk had an aggressive sales person but he was not well organized.
The whole emphasis was ‘How do I get sales, how do we get revenue? This has to be profitable very quickly,’ ” Macfadyen recalled. They grew revenue quickly and were at break-even in two years.
But the high-churn operation wasn’t going to go the distance. “We were selling the inventory over and over again. There was no focus on long-range contracts,” he said.
“We had contracts, I was billing every month, but it was completely disorganized. I didn’t know enough about it to bring some structure. Until we changed the culture on sales side, the company wasn’t going to succeed,” he said. “We never were going to get to the level we needed to grow.”
Offer Incentives for Long-Term Contracts
A number of other practices make sales more effective and efficient. They include creating a media kit and rate card to share with potential advertisers and, offering incentives for long term contracts.
Local news sites sell display advertising on a monthly basis. Rates range from a couple of hundred dollars a month to a couple of thousand a month depending on the size and placement of the ad and on the audience reach of the news organization.
For example, one of the smaller sites, Watershed Post, charges $200 a month for display advertising, $100 a month for sponsored posts, and $75 a month for event promotion. Watershed has 45,000 unique monthly visitors.
Meanwhile, one of the larger local news sites, Noozhawk, charges $1,450 a month for prominent display in high-traffic sections of the site and $165 to $600 a week for run of site advertising, depending on prominence and size. Noozhawk has more than four times the traffic of Watershed with 196,000 unique monthly visitors.
Third Door Media, with its audience of 1.4 million unique monthly visitors, charges $4,000 per week for daily advertising across its network, which includes multiple sites and newsletters. Search Engine Land also offers CPM pricing at rates ranging from $25 to $60 depending on size and placement.
That contrasts with the much smaller Budget Savvy Bride, which averages $3 per CPM against an audience of 82,000 unique visitors or She Finds, which has seen its rate through the Glam network fall as low as $2 against 1.5 million uniques.
Many publishers try to get advertisers to sign long-term contracts because ongoing exposure works best over time and the publishers want to avoid having to constantly sell or resell inventory. Several publishers said they aim for one-year contracts but also will sell for six, three or even one month.
For example, a Noozhawk ad that costs $165 a week drops to $110 a week with a yearlong contract; the $600 a week placement drops to $400.
Long-term contracts assure that “you’re not always reinventing the wheel” in reselling ad inventory, Clark said. “They are advertising long enough to see if it’s effective. “
Create a Rate Card
Once a rate structure is established, a media kit or rate card is an essential tool for ad sales. Many publishers post their rates online although some have print only kits that they hand out to advertisers. Links to rate cards available online are in the chart listing sites in this report.
Key elements of a media kit: A description of the site and its mission, its traffic numbers and audience demographics to demonstrate reach and engagement; ad rates for different products as well as mock ups that show ad sizes and placements on the site; testimonials from satisfied customers and examples of campaigns.
Technical.ly, for example, touts that advertisers can “Reach 100,000 trend-setting local influencers in east Coast tech communities” and promises to “work directly with clients to deliver engaging and authentic campaigns to market your company, product or initiative to a growing audience of technologists, entrepreneurs and people who care about technology’s local impact.”
Among traffic statistics, Technical.ly notes that 60 percent of its audience are millennials, 40 percent are women, and 35 percent earn more than $100,000 a year. It describes a number of campaigns for clients including Comcast and Every Block.
Third Door Media emphasizes that 90 percent of its audience are purchase decision-makers. Its network of three sites offers advertisers the ability to “engage future customers while they are participating in professional development and receptive to learning about new product and service solutions.”
While the media kit needs to provide enough information to be compelling, BuySellAds advises: “Keep it simple” in terms of advertising options.
“Advertising is overwhelming. Advertisers have to compare your ad placements to each other and to placements on other potential sites. Everyone has different placement, pricing, ad sizes…. Make it as easy as possible for the advertiser to wrap their head around what you’re offering.”
Manage Your Team and Your Pipeline
A call sheet and a customer relationships management system are other important sales tools. On a daily or weekly call sheet, a sales person logs her activity, including contact information for a potential advertiser contact information as well as the what was discussed, the result and the next step. That information can be incorporated with other sales leads into a CRM that tracks contacts with potential and existing advertisers over time.
Among the 22 outlets in the study, 14 said they use a CRM. Two with multiple mentions in the survey were Capsule (four sites), which has a free level of service, and the more expensive Salesforce (three sites).
Those who manage sales people cited these practices: Standing meetings with the team as well as daily conversations with each sales rep.
“Standing meetings and goal-setting are crucial,” Robert Morris, of Uptown Messenger, said.
Technica.ly has a Monthly Failfest to discuss failures and a bi-weekly SuccessFest to discuss wins.
Ben Ilfeld, who operated The Sacramento Press until 2013, said it is important to make sure sales reps are working leads aggressively and not just focus on the close rate.
“When sales are low, it is easy to start pointing fingers and pointing out all the things that your sales force is doing wrong. But I guarantee that the things that broke down, broke down months ago,” Ilfeld said “Low sales now is about low lead flow earlier.”
Tyree Worthy, the sales rep for Uptown Messenger, said keeping a steady flow of a pipeline of prospects and follow up with advertisers is critical.
Worthy aims for 10 contacts a day, usually by email or phone, with past, present or potential clients. “I try to contact 10 prospects week – setting up a meeting, or sending them rates or finalizing a deal.” Using this system, he typically picks up at least one new advertiser a week.
Avoid Cold Calls
There was not a clear consensus among publishers in the study about the best approach to sales – face-to-face meetings, phone calls or emails. It may depend on the market, the type of advertiser and what seems most efficient to the sales rep.
Cold calls are the least effective route, most of the publishers said. “The worst thing you can do is randomly call a million people. They tell you ‘no.’ They always tell you ‘no’,” Clark said.
”I tend to use email because it’s a lot faster and I can get my point across as clearly as possible,” said Tyree Worth of Uptown Messenger. “Some people don’t use email. A lot of business owners don’t answer email so I’ll do a call.”
Clark, on the other hand, said she has found face-to-face meetings yield a high percentage of contracts. “If they give you their time, they’ve already invested in wanting to do this. It’s up to you to reassure them that it’s’’ worth trying.
To get to the point of having a meeting with a potential advertiser, Clark recommends “pleasant persistence.”
“When you continue to follow up with a lead, you’ve got to keep on it. I keep on it until I get a face to face and then I do the presentation,” she said. She asks a prospect to tell her if they are not interested. If they don’t say ‘No,’ she basically follows up until the person says OK. “Until someone just flat out says ‘Look, leave me alone,’ you don’t stop.”
Publishers said a sale might take anywhere from a few days to a month.
Develop a Sales Routine
Blasi said he has developed a routine that helps him make sales, which typically take him three weeks and three visits.
“First visit, I usually say hello, leave my media kits, and if they aren’t familiar with our site, I ask them to look at it for two weeks. Second visit, two weeks later, I stop in to see if they are viewing our site, ask if they like it, ask to set up an appointment so I can review our Google Analytics. Third visit, I usually close the sale. Sometimes, advertisers sign up on the first or second visit. Sometimes (more rarely) it takes a lot longer,” Blasi said.
Clark recommends finding small touch points for prospective advertisers, such as sending a link to a story they might be interested in or links to materials about online advertising or making a point of seeking them out at local events.
Do not underestimate the difficulty of ad sales
Regardless of the level of experience, advertising is a tough sell in local markets.
“Advertising sales is difficult because no business owner wakes up in the morning and says ‘Man, I need to buy some advertising. I can’t wait to do that,’ “ Uriah Kiser of Potomac Local said. “Our job is to convince people to buy. If you don’t have the experience to overcome objections, it doesn’t work.”
Among the local news publishers in the study, most cited cost as the most frequent barrier to a sale.
Another challenge is that small businesses tend to be fairly traditional in their approach to advertising and have little experience with online ads. That’s why they most readily understand simple display advertising. The publishers report little or no demand for ad other products. With their limited capacity and lack of demand, they have have opted to focus on display.
“Sales is getting harder and harder. People do not have money to spend on advertising. They have to make choices between print and digital and they don’t want to split up the pot. Digital for some people is still a leap of faith. They want to see adds in the paper not in the stratosphere,” said Annette Batson of BaristaNet.
In retrospect, Sacrament Press founder Ben Ilfeld believes heavy reliance on display advertising was a vulnerability of the site, which failed to develop a sustainable revenue model.
“I would actually have focused on passive revenue streams like ad exchanges, affiliate programs and self-serve products like directories first. This wouldn’t produce a ton of money, but it would have been a strong baseline and a stabilizing force,” Ilfeld said.
“I think you have to grow and grow fast. But you need to have the confidence that if it were just you, the business would still work. So building those passive revenue streams is crucial.”