Sunday, May 20, 2012

Making money Part III: How journalists can do ad sales

This weekend I spent a day and a half participating online in NewsU's Revenue Camp for Journalism Entrepreneursan intense session on some of the new ways journalists are making money on the Web. (The entire course will be available to view online in a few days; Twitter comments from the course are at #revcamp.)

The biggest mistake that journalism entrepreneurs can make in selling is assuming rational behavior on the part of the client, says Mike Orren, principal of Just Be Amazing, a consultancy on content, sales and marketing. 
We might think the client will buy based on the traffic numbers or the audience profile, but often the decision is an emotional one: the client likes the sales rep from your publication more than the rep for a competitor, Orren says. (My own experience as publisher of a business journal is similar to Orren's.)

Orren knows whereof he speaks because he has been both a journalist and marketer. He was a founder of Pegasus News in Dallas Fort Worth, the largest independent local news and entertainment site in the U.S. 
Know your client, make them know you
Participants in the Revenue Camp wanted to know how to find advertising clients. Orren said to go to the businesses you are writing about, call on the people that are talking about you on the Web, go to the users of your website, because they already know you. 
He told of being close to a huge advertising sale to a group of automobile dealers. All the data he presented them showed Pegasus News delivered a more targeted audience at a lower cost than the daily newspaper. They lost the deal when one of the influential dealers said neither he nor his sales manager had ever heard of Pegasus. The dealers stayed with the daily newspaper.
Your competitors' advertisers
Get out and talk to potential advertisers, Orren said. Get them reading your news. Focus on businesses that are already advertising with others because half the battle is getting a business to start advertising for the first time. 
Orren urged daily review of key metrics on Google Analytics or a similar service to see what users are interested in and to find data that would impress a particular advertiser. He was able to show the owner of a music venue that a significant amount of outbound traffic from Pegasus was going to the venue's website.
What to charge
For all but the very largest news sites, it is a mistake to price advertising based on CPM (cost per thousand.) The revenue generated will unlikely be enough to sustain an editorial operation. Better, he said, to focus on the value of the audience -- income, education level, passion for the site's subject matter (based on return visits, time on site), geographical location of users and other metrics that go beyond total users and page views. Your pricing needs to be in the context of the market, but don't necessarily price below competitors.
  • Look for special promotion opportunities, In the case of a wine merchant, Pegasus promoted a wine tasting for a client, who was delighted when 20 people showed up. All of them bought at least a bottle. 
  • Make the media kit easy to find on your website (on many it is not). Don't put the rates in the media kit, he says. Rates are just an excuse for the advertiser not to follow up and call you. 
  • Let your sales rep present the rates in the context of a conversation about the value of your audience, which is really the most important thing the client needs to know.
  • Keep the rate card simple because advertisers don't want to spend a lot of time trying to decipher all the options. Price the ads to get the behavior you want -- if you want frequency, reward that with discounts for higher frequency. 
  • Don't cut deals off the rate card. Word gets around, Orren said. If one client gets a big discount, all the other clients will want it too. They talk to each other. 

Letting others sell for you
Orren is not a believer in using ad networks, which will sell your remnant space for you. The amount of money you get is so little and the ads from the networks can sometimes junk up your site ("hit the monkey and win an iPod"). 
The best way to generate revenue from advertising is from direct sales by your own staff. They know your product best and you control the pricing. It is also the most expensive way to generate sales because of the training and commissions, Orren says, but over the long haul, this is the best.


No comments:

Post a Comment