This initiative has an advertising committee that gets together (virtually) every month or so. They are members of media companies worldwide, and we discuss the latest trends in the media advertising space with a view to providing insights and industry thinking, which can be shared with fellow INMA members.
The latest addition to this committee is Thomas Schultz-Homberg, CEO of Kölner Stadt-Anzeiger Medien in Germany. His background is that he (a former journalist) came to Cologne in October 2020 after a long career at different news outlets, serving in various editorial and management roles. For the previous seven and a half years, Thomas was chief digital officer at Frankfurter Allgemeine Zeitung.
He has worked in the digital business since 2001 and is currently focused on AI, machine learning, and the development of audio products. Thomas has strong views on advertising, and I was fortunate to spend time with him recently to get his view on the big questions that circle the advertising side of our media industry.
A bit about Kölner Stadt-Anzeiger
Before I get into the “meat” of our interview, a word or two about Kölner Stadt-Anzeiger Medien for those not familiar:
Kölner Stadt-Anzeiger Medien stands for products that convince with journalistic quality and local tailoring: Kölner Stadt-Anzeiger and EXPRESS are the leading titles in the region with a clear focus on regionality, topicality, and authenticity.
With a total of 60 million monthly visits, the digital offerings of their regional media are among the highest-reach news portals in Germany. Their regional advertising papers and radio stations are embedded into many people lives every day as their first source of information and entertainment.
Mark: I want to dive into your thoughts on tech state of the advertising business today and where you see it going. Firstly, how was the pandemic for you, sales-wise, in terms of revenues?
Thomas: Of course we saw declines in all markets, especially during the lockdown periods. After that, the markets have recovered but not to the level we had before the pandemic.
Mark: How is the advertising market in Germany now? Are you seeing a pent-up demand coming to the fore?
Thomas: I think we are already in the middle of a certain pent-up demand in advertising, e.g., in gastronomy and event business. Though we do register a slight rise of uncertainty on the advertiser side due to inflation, energy supply, and fear of war since Russia’s invasion of Ukraine.
Mark: Has the pandemic changed your approach to how sales teams should be structured going forward? And if so, how was it before and what has changed?
Thomas: Given the pandemic being the reason for the acceleration of digitisation, it has changed a few things. Not so much the structure of the teams but the way they work. There is more flexibility today, a growing use of digital tools like video conferencing, online presentations, and cross-media sales.
Mark: What should they be selling now? Is that different from pre-pandemic? Is print still important?
Thomas: Actually, what we sell is not that much different from pre-pandemic. But since we had the experience of a sales crisis during the pandemic, I think in regional advertising we must focus more on cross media today than we might have done in the past. The differentiation between digital and print will vanish in these packages, which is good. And of course, print is still important in that cross-media game.
Mark: What about automation? Do you believe in automating everything that can be?
Thomas: It won’t be everything but certainly a lot. Primarily in digital, that’s for sure. Not only that, but a huge part of the market is already automated to programmatic advertising.
However, think of display ads being created and published in real time to the user’s need. Of course, that must happen in a kind of defined framework. Nevertheless, this would be a great push to (advertising) personalisation. And even print can play a role if you get to automated creation via on-site planning of print formats from display campaigns.
Mark: Does self-service advertising play a part?
Thomas: It will, yes. Not a significant role yet, but with the ongoing digitisation of people’s lives in certain regional segments, there will be a demand from the buyer’s side. There is some in classifieds already, and I can imagine something similar in display, too — even with AI-based creation of the display ad itself. And if that works in digital, you can offer the same for print, too.
Mark: Some media have told me that agencies have appreciated seeing sales people again after lockdown. Did you find any truth in this? How important is face-to-face selling?
Thomas: What else could they have said to be polite? Seriously, of course face-to-face plays an important role — especially when it comes to direct deal making between regional advertisers and regional publishers. Remember the cross-media packages I mentioned? Those are often high-volume bookings on a very individual base of media mixture. For example, in such contexts, face-to-face leads directly to more revenue.
Mark: What does e-commerce mean to you? Is this something our sales people should be selling?
Thomas: E-commerce is a very important part of the picture. It often brings you more stable revenues than display advertising, depending on the business model you negotiate, e.g., a mix of base fees and revenue share. Specialised sales people should be selling that, yes. Partly that makes us a little bit more independent from the sole display business that relies mainly on reach growth.
Mark: Are you confident in ad sales revenue being a cornerstone to future media revenue streams?
Thomas: I am — if we understand that there is more than “only“ display advertising. If we create the right mixture that consists of cross media, programmatic, native, e-commerce, recommendations, cooperation, and so on. Then we will succeed.
So, there we have it. Thomas seems to hit the nail on the head with that last comment.
A blend of offerings will lead us to a successful future. Note he said e-commerce is an important part of that future.
The world has changed, and we must all grasp it with both hands. That could be not just a blend of sales offerings, but also maybe considering AI, data, automation, self-service, and the like and by using the right tools to help us.
Programmatic is here to stay. Some people have indeed told me it has ceased growing (but not declining) somewhat since sales people can now visit agencies and advertisers in person again, but it’s important we get the sell and approach right.
We need to be selling, as Thomas put it, “more cross media than ever before.” And that leads to us being experts in all channels and having the ability to cross sell packages expertly to gain the confidence of the prospective buyer. All part of the mix of selling correctly and effectively.
As Thomas said, “If we create the right mixture, then we will succeed.”
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