A critical tactic, in terms of producing results, was recruiting experienced, professional sales personnel and compensating them with a living wage. Both often proved highly challenging, especially for bootstrapped start ups that cannot pay competitive rates for highly in-demand sales representatives. However, companies that were able to recruit effective, professional sales teams consistently reported revenue gains.
While most of the sites hired professionals, others brought on a partner to focus on the business side or relegated more editorial production to freelancers, freeing the founder to handle sales.
The niche sites represent a range of approaches to sales – from the highly sophisticated sales operation of Third Door Media, which publishes Search Engine Land, to largely “passive” sales that rely heavily on ad networks at sites including Miami on the Cheap, Budget Savvy Bride and She Finds.
Most of the local news sites are run by journalists and they often struggle to master sales skills and fail to devote adequate time to sales. They also find it challenging to identify and recruit potential reps in a highly competitive market for sales skills.
Among the sites in the study, some journalist founders say they are learning to sell because they have to but acknowledge they may be missing out on revenue. Others have found ways to add sales people; they report significant revenue growth after they professionalized their sales teams.
Wippel changed how she divided her own time. “It’s 50-50 now,” she said in 2013. “For me, that’s big. It was 70-30, 70 percent content and 30 percent everything else. It’s hard to move away from content. It’s just default.”
With enough revenue to hire part-time help in 2011, Blasi and his co-founder and wife Denise Civiletti debated whether to add a reporter or a sales assistant. They hired a sales assistant, and more than doubled revenue. With the additional revenue, the site then hired more editorial help. Revenue continued to increase significantly in 2014, when the organization launched a second site. Earnings were in the $200,000-$500,000 range in 2014.
Another approach for journalist publishers is to bring onboard a business partner to handle sales and revenue development:
It is difficult for even large, established news companies to recruit good sales people.
In the newspaper environment, “there appears to be formidable competition from online pure play companies like Yodle, Pandora, Yelp, ReachLocal and others,” Borrell Associates, a leading media research company, reported. “The pure play managers in our 2013 survey reported an average starting salary of $54,100 for reps, which is about 50% higher than what TV, newspaper and radio managers were offering.”
A well-funded national company, Third Door Media, was able to recruit highly experienced sales reps that co-founder and CEO Chris Elwell has known from his decades in the business. “The minimum experience of this group is 15 years, maybe even more than that. But these people have been selling events and media products to clients and agencies for a very long time, Elwell said of his sales team of five.
However, small, bootstrapped start up news sites are even more challenged because they are untested ventures and may not be able to match the compensation available from more established companies.
“Finding the right sales people has definitely been the hardest part,” said Gilfillan.
Other publishers report difficulty in recruiting effective sales people, often describing a process of trying and replacing multiple reps.
Teresa Wippel, who operates My Neighborhood News Network of several sites north of Seattle, Washington, described a frustrating search for someone to supplement her own ad sales.
After she launched My Edmonds News in 2009, she sold advertising herself for a few months and, over the course of more than a year, tried out five people before the sixth one worked out.
“That’s typical from what I can tell,” Wippel said. Of the five who didn’t work out, she said one lacked initiative, others found out selling advertising was harder than it looked, and one wasn’t locally based.
Glenn H. Burkins, publisher of QCityMetro, a local niche site for African-Americans in Charlotte, N.C., has had a similar experience. “I have yet to find a good sales person,” Burkins said. “They just didn’t work out. They spent all their time servicing the ads I already had and not bringing in any new customers. Or they spent more time reworking the media kit than they did selling it.”
Ben Ilfeld, founder and former owner of the Sacramento Press, said his ace salesman was recruited by another company and it put a dent in revenues from which the site never really recovered. (Ilfeld also said his focus on other ventures also sapped the attention Sacramento Press needed and he sold the site in late 2013 to a marketing company.)
Gilfillan said even with a good replacement, turnover can affect revenue; it takes 90 days to onboard a new sales rep.
Smaller local publishers cited an element of luck and local connections in finding a good sales person.
Berkeleyside in Berkeley, California, for example, found help from an acquaintance, Wendy Cohen. “She was somebody we knew personally. It really was a little bit like one of those Bing Crosby movies. ‘Let’s put on a play. Who has a barn?’ We thought ‘who can help us. Oh my god, what about Wendy!’ It was so incredibly obvious when we thought about it. We were lucky in that regard,” co-founder Lance Knobel said.
Publishers often draw on their readership and community connections to recruit sales people, advertising on their own sites or social media channels. That way, they can attract sales people who already know about, and presumably like, their sites.
Gilfillan, for example, posted on Facebook that her Home Page Media Group was looking to hire ad reps. Another rep is the daughter of a member of a community advisory board Gilfillan formed for her company. She ended up with a sales team that was familiar with the sites. “They were readers already.”
Publishers cite a variety of qualities that make a good sales person, with deep community knowledge and connections chief among them in local markets.
“If you hire a sales person, they need to be embedded in the town and know everybody,’’ said Peter Blasi of Riverhead Local.
Other qualities include positivity and persistence.
It helps to be a people person. Typical sales people “are very engaging so they’re likeable, one of those life of the party type of people,” said Kim Clark of Noozhawk. The management challenge, she said, is that effective sellers are not always well organized about follow up such as paperwork.
“The general thing about being a sales person is you’ve got to be willing to be
rejected,” said Chris Elwell of Third Door Media. “It’s a tough thing to get up and dust yourself off every day and have people not answer their phone, not answer emails, not give you the time of day until they’re ready.”
Elwell said another major challenge is keeping up in a dynamic digital landscape.
“In this environment you have to learn all the time because there’s something new coming at you and you have to be willing to learn what the new value proposition is and present it in that you’re enthusiastic about it.”
Mark Roberge, SVP at HubSpot, analyzed successful reps at his company and found these attributes: Coachability, curiosity, work ethnic, prior success, and intelligence. Hubspot produces inbound marketing software and services.
Roberge “recommends training all sales people with a similar process that allows them to be more consultative to prospects. And the secret sauce is forcing them to know the product, live the product, use the product. etc. This will help them know the prospects’ pain points,” BIA Kelsey said of Roberge’s approach.
Given their difficulty in recruiting good advertising sales people, publishers say they have had to come up with creative ways compensate them even though their fledgling businesses may not be highly lucrative.
The publishers report a mix of compensation packages – some pay commission only, some also pay a base salary and some offer bonuses when sales reach a certain level.
At the low end, a commission might be 5 percent for a sales person who also draws a salary. At the high end, a commission-only sales person might take 70 percent commission for any sales above agreed-upon goals.
Here are some examples of compensation packages:
The commission was a flat 30 percent when they were independent contractors. Under the old system, one full-timer earned $48,000 a year and one with higher sales made $68,000. Gilfillan said one part-times sales person chose to remain a contractor and can make about $30,000 a year. Under the new system, it is 25 percent for new advertisers and 15 percent or renewals.
Gilfillan in 2014 brought on a full-time development person who manages the sales team and sells some advertising. That person has a base salary of $36,000 and can make about $100,000 a year total with base, commission on her own sales and a cut from the sales people she manages.
We wanted our sales person have the opportunity to make $70,000 to $75,000, which is asking for quite a bit of… Click To Tweet
The publishers report a mix of compensation packages – some pay commission only, some also pay a base salary and some offer or bonuses when sales reach a certain level.
“We wanted our sales person have the opportunity to make $70,000 to $75,000, which is asking for quite a bit of performance. But it’s doable if you have someone who is motivated,” Clark said.
Some publishers pointed to employing part-timers as a problem because site sales were not their main focus.
David Boraks, who launched his first site near Charlotte, N.C. in 2006 and began ad sales in 2008, relied for more than five years on part-time sales people working for commission only, mostly mothers who wanted part-time work while their children were in school. But their efforts did not bring in sufficient revenue and the operation has had financial challenges.
A part-timer can work. One of the smaller sites, Potomac Local in Northern Virginia, employs a part-time sales person. That person’s other job is night and weekend sales at a local auto dealership.
Owner Uriah Kiser said the part-time sales person has worked out for him, partly because the sales person sees the site as a community asset he wants to support.
“He helps sustain us as an organization and it puts him into the community, which helps him. I am lucky he is motivated by money as well as serving the community.”
As their websites have matured, many other publishers have noted that they wished they had started on revenue earlier. Anecdotally, more startups appear to be selling ads from the outset compared to just a few years ago, according to site assessments for Michele’s List, a database of startups.
However, in the past decade, dozens of sites have failed because a journalist founder focused on editorial at the expense of aggressive sales and revenue development or because they were simply unable to find an effective sales person.
David Boraks, who operated two local sites in North Carolina until 2015, provides one cautionary tale.
He launched DavidsonNews.net in 2008 and a second site in a neighboring community, CorneliusNews.net, in 2011. Unable to recruit a full-time sales person, he relied on part-timers and the company struggled. Finally, at the end of 2013, Boraks recruited his first full-time sales rep. That employee increased revenue by 50 percent in 2014 over 2013. But Boraks concluded that he needed to grow is company to cover two more local communities – but he had neither the money nor the energy to to that. The sites ceased publication June 1.
“Finding a full-time sales person earlier would have made a difference,” Boraks said. “We tried. We couldn’t find the right person who could work for us for what we could pay They were six-figure persons. The other (sales) jobs around here are that. We can’t afford that.”