Publishing companies look to expand their digital audiences and digital portfolios, but still face monetization challenges
Traditional print publishing companies continue to staff up with new digital media pros, but while total audience size continues to grow, revenue growth challenges remain
There are two big trends in traditional publishing right now: bringing on new digital media executives, and restructuring sales staffs. One trend gets a lot of publicity as publishing companies love to brag about new hires, the other trend is seen only in small stories on trade industry websites about rumors of layoffs.
The first trend can be explained by traditional media’s continued problem monetizing its digital audience. Magazines and newspapers continue to grow their audiences, as the trade associations like to publicize, but monetizing that larger audience remains difficult.
The problem is not, as many executives seem to believe, that their audiences are too small – though that can sometimes be the case – but that they do not have the types of ad offerings being sought out by brands and ad agencies. It is also hard to win an ad schedule promoting a brand that means absolutely nothing to the ad buyer, despite that brand being twice as old as the media buyer’s age.
Some of the larger publishers are, therefore, in the acquisition market, buying up digital brands that promise to double or triple their audience in certain demographics. Many of these digital media properties have been very successful in attracting large audience, but are available to be acquired because they, too, could not monetize that audience.
They are also bringing on new digital executives that have worked at digital-only media properties. Of course, we’re not talking about sales people, we are talking about digital content people. That means the monetization issue is sometimes left to a “build it and they will come” strategy.
Meanwhile, one trend that seems to me to be cyclical is sales staff restructuring. From single brand oriented sales staffs, to category targeted staffs, to individual account (or corporate) sales staffs. This is a trend that sometimes has a limited lifespan, as companies reversed their decision of some of the portfolio is hurt by the restructuring.
It makes perfect sense that a publisher with a large portfolio of magazines or newspapers would want to limit the number of reps that call on a single account. One visit to an agency’s waiting room is enough to tell you that there are sometimes just too many reps from the same company calling on the same ad decision maker. So, publishers see the logic in creating corporate sales teams, or sometimes category sales teams.
The problem with the approach becomes obvious when you consider this from the individual title’s perspective. If you are the publisher of the big magazine that suddenly will be getting more business, because the rep’s sales pitch always start with that big brand, then this change is great.
But for the struggling title, the magazine with 150,000 in circulation, not 3 million, the threat is that they will start seeing less pages (though maybe more lower priced digital advertising) in the new year. Plus, who will that single rep end up being: the existing corporate rep, the rep from the big title, or the rep from the smaller title? Often the rep at the small title is laid off in the name of efficiency.
This last fall into winter we heard of a number of magazine titles that were shuttered, look for more of this in 2016 as publishers build up their online media portfolio, restructure their print sales staffs, and start seeing some of the books losing more ad pages.
Nonetheless, there are obvious advantages to consolidated sales efforts beyond reduced cost, such as the ability to sell digital ad programs that utilize a publisher’s entire audience in order to present greater reach. Some publishers may employ a hybrid sales approach where much of the emphasis lies in corporate team selling, while retaining smaller, dedicated sales staffs for individual titles. This may be especially necessary where a B2B publisher has many titles in a specific industry, but only one or two in another.
Print sales people are often dismissed as dinosaurs, this is often the way those at digital-only media properties look at traditional print publishers. But a third trend has been occurring for a long time that proves this not always to be the case.
I cannot tell you how many times I have heard of a magazine or newspaper rep being laid off, then turning up later at a digital media company. Why were they hired if they are really unqualified to sell digital?
The reason is that these reps had two things no one else could bring to the digital media company: they were well-trained sales professionals; and they knew their clients like the back of the hands, often selling them for more than a dozen years.
While there are many younger ad sales people who have never sold anything but digital, and who have a great track record of success, there are also more experience reps who started in the print field and made the transition to digital with relative ease thanks to their ability to understand the needs of their clients and then present the new digital ad solutions.
Understanding this, I am surprised that more traditional publishers have not gone to sales teams that incorporate veteran print reps that understand their clients, with more technical reps who understand the new solutions that the company want to offer. Of course, the problem is paying multiple people for the same ad sell, but revenue sharing is often quite common in print sales where the brands and agencies are represented by different reps.
One magazine publisher who had to face a reduced sales staff size when the company restructured the sales organization lamented that they felt that no one at the company understood who and why past advertisers bought the magazine, and that the news staff simply had bigger fish to fry rather than continue to sell their magazine. He feared the worst as ad pages would begin to fall.
“We need three things,” he told me recently, “reps have sale skills, reps who understand the magazine, and reps that understand and personally know the clients. Having all the digital media skills is great, but they are no substitute for those three things.”
That sounds a bit old fashioned, but I think his point is valid, while not at all dismissing the need to learn new technology, ad terms, etc.