The time for strategic and business plans is upon us. After the many years I have served this industry, I am still amazed at how inwardly directed many strategic plans continue to be.
So, here are our recommendations on what should be in the advertising sales section of the strategic planning document.
Set the scene with data, not whining.
A well-written advertising sales plan should establish the “outside-in” perspective on the market. Though you may not be able to control the tone of the whole plan, it is important to capture an objective view of the marketplace. At a minimum, this should include:
- Total advertising market size estimate, including non-traditional newspaper categories.
- Advertising spending estimates by major advertiser category (e.g., department stores, discounters, auto dealers, etc.).
- Estimated advertising spending by media mix (local TV stations, local radio stations, free weeklies, etc.).
- Forecasts on where advertising growth is expected, by major advertiser category.
- Major intermediaries, their advertisers, and funds they represent (ad agencies, creative shops, media buying firms, etc.).
Some media companies collect and monitor this basic information regularly. If you do and want to have even more insight, estimate the sizing with total marketing spending, not just advertising. This provides an even broader view of where there may be budgets available to try to tap and may inspire new marketing services.
Another refinement, particularly in larger metros, is an estimate of marketing expenditure growth geographically — as suburban areas have become their own commerce centers. The action is typically not just downtown anymore.
Identify the newspaper’s position objectively, not the stories we tell.
Once the marketplace frame is set, it is important to note the newspaper’s position objectively. Please be careful not to just regurgitate back what is in the sales materials. We know the purpose of these external documents is to present the most favourable spin to the marketplace. This is the time for the truth, warts and all!
At a minimum, the plan will show estimates of market share by category. These are tricky to calculate. There is not a perfect methodology to calculate market share. We recommend our clients select the way that makes the most sense, given their market, and use it consistently.
Most importantly, it should ideally contain relative market share. For example, the position of the local media company is quite different if it receives US$200,000 from a category estimated to spend US$5 million in advertising, and the next largest media player is getting US$180,000, versus a category where the next largest media player is getting US$50,000.
Articulate why you should win and set priorities by ad category.
An advertiser does not have to spend with newspapers, and the pressure builds every day with new options available at lower prices. A disciplined review of each category, therefore, should include an informed view of the challenges facing the advertiser’s business.
Simply put, why does the local media company “deserve” funding from that advertiser segment? If the advertisers are facing their own issues of restructuring, how can the media company help face those challenges? Consider health care, retail, and supermarkets as examples.
Part of this category review includes an assessment of the competitors currently serving those advertising categories and why funds should be moved from one or another to you. There are clearly some growth categories in markets, but for most, it is essentially a “steal share” game.
Audit capabilities and propose requirements for success.
The plan needs to articulate the capabilities and assets that are needed for success. This obviously addresses the number, mix, and talent of the sales organisations. But, it also includes sales alignment — are the sales compensation plans rewarding the right behaviour for the ad category?
The sense of alignment extends beyond the sales department — are we delivering the depth and number of the audiences demanded by the advertisers? Are we providing the content and look/feel that is consistent with the actions desired by advertisers and the image of their campaigns and brands? Are we priced to return a good value to the advertiser?
Build in benchmarks, monitor and adjust throughout the year.
Beyond sales targets, a top-notch advertising sales plan identifies the metrics to monitor throughout the year. This could include market share, retention/acquisition revenue goals, account penetration metrics, number of sales calls, etc. The important part of these metrics is that they allow the sales teams to know how they are progressing in an ongoing way, not just in a month-to-month and quarter-to-quarter panic on the sales revenues.
As you are building the three-year strategic plan, two-year business plan, or just the 2013 budget, I hope you will find these five topics helpful. They remind all of us that planning cannot be done in a vacuum and must reflect advertising, consumer, competitor, regulatory, and technology changes in the marketplace.