December 19th, 2007
I can’t count the number of times I’ve listened to print publishers debate whether to use a dedicated online sales staff or use what Borrell Associates calls “convergence sales,” in the report 2008 Local Online Outlook: Convergence Era Ends, Stand-Alone Sales Skyrocket. “Convergence” means, in the worst (all too common case), print sales reps tacking on online ads as an after thought, or — in one of the all-time great “shoot yourself in the foot” ad sales strategies — as “added value” (ad sales euphemism for “free”).
Even as recently as last year, I’ve heard publishers make strong cases in favor of convergence selling, e.g. one rep owns the whole advertiser relationship, no bothering advertisers with multiple sales calls, single point of accountability, etc.
Now, as print publishers confront the reality that their center of gravity needs to shift to digital (let’s leave aside for a moment the critical question of how long it will take), the overwhelming evidence is that the only way for the online business to become self-sufficient — and ultimately carry the whole business — is to free it from being the bastard stepchild of the print business.
It’s time to cut the cord.
The smoking gun from the Borrell report is that pure-play online media is eating the once monopoly-protected lunch of local print media — these online players don’t have to worry about supporting, protecting, not competing with, or creating “synergies” with a print media business. They can just focus on maximizing advertiser value.
(Chart and hat tip: Alan Mutter, chronicler of the news business)
But what about competition between online and print? What about the loss of ACTUAL synergies? What about the real risk of annoying advertisers?
Imagine your online publishing business is a plane trying to take off, but you’re worried that you’re going to run out of runway before you achieve takeoff velocity — that brick wall at the end of the runway is your legacy cost structure. And you’ve got the 4th Estate on board the plan.
So what do you do? Do you slow down to give yourself more time?
No, because then you never achieve sufficient velocity — and it doesn’t matter much runway you have. You still hit the wall.
Instead, you give it full throttle.
That’s why publishers need a dedicated online sales staff — to give the online business full throttle. Every publisher celebrating double digit percentage growth in online advertising knows they need triple digit growth…full throttle.
Local print media have sales channels that should be the envy of every pure play online publishers — instead, they have one arm tied behind their backs by the print business.
I know this is easy to say. But I’ve sat in on sales calls where online had to jockey for attention. I’ve seen the sales rep incentive plans and rate cards — weighted towards higher priced print inventory. And I’ve given workshops for local advertisers about online advertising — they are a lot savvier and can “get it” a lot quicker than many reps probably give them credit for.
Convergence ad sales means talking out of both sides of your mouth — no advertiser is going to slip their money 50/50 between online and print. One has to lose. And publishers have been so focused on keeping print from losing that they have never given online a real chance to win.
Competition between online and print reps may seem like the equivalent of civil war — but competition, if done right, could be the burst of speed that allows the digital business to take off.
As for print — it has not choice but to fend for itself. There’s no more market protection externally — how is it sustainable to provide market protection internally? The print business doesn’t have to die — but it does need to be radically restructured as the online business grows.
Of course, the other missing ingredient is a burst of speed — in terms of growth and innovation — on the product side, so that an empowered online ad sales staff has more audience and more inventory and more high value marketing solutions to sell.
That is a topic for another (perhaps the next) post.
For now, step one — cut the cord.