Here is the one professional New Year’s resolution you need to make in order to make it a great year:
Grow digital revenue 50% year over year.
Before you click the close button, think about what this looks like:
First and foremost, digital growth of 50% or more is attitude — a belief that it can be accomplished and the will to pursue a big goal with energy and confidence. It is serious “culture change,” on which Earl Wilkinson spends the first three chapters of his recently released, must-read Newsmedia Outlook 2012.
Single-digit digital growth is a non-starter. Double-digit growth in the range of 20% won’t get you there. But 30% digital growth rates put you in the game. And 50% growth rates start to cover up print revenue losses and create a bright future for newspapers in their local markets.
Every time I have this discussion, people say, “Don’t forget about print.” Don’t. I have written and spoken at length about the effectiveness of the total-audience, integrated sales model that combines digital with print.
In case you haven’t noticed, print revenue has been in decline for several years, as audiences have moved to digital platforms. Sales strategies must move with them. Ad dollars follow eyeballs.
Let’s be very clear about who has the largest audiences in our local markets. Generally speaking, we do. In virtually every market, the combined print and digital audience of the newspaper, regardless of market size, is far greater than that of any local competitor.
So why, one might wonder, are newspapers in most cases suffering from negative revenue trends? The impact of a sustained economic decline is only part of it. The biggest reason is newspaper sales organizations, again in general, have not been effective in selling digital advertising.
Based on what? Current digital growth rates. Percentage of digital revenue to total ad revenue. (An exception has been Journal Register Company over the last two years).
Sell advertisers what they want to buy. Why would a sales organization want to pursue any other sales strategy?
I have personally spent countless hours in front of advertisers of all sizes. They want to understand how to buy or mix digital advertising with their legacy advertising marketing plan, which includes print, broadcast, cable, or radio.
They will tell you they want to reach consumers in specific geography or target consumers that have a certain behaviour. They want to do it in a way that produces leads and store traffic. On mobile and social platforms. With video. With support from search. No secret, right? Yet, based on current digital growth rates in the newspaper industry, we are not generating enough sales on multiple platforms to achieve the necessary hyper-growth to stay competitive in 2012.
Revise the incentive compensation plan to support 50% growth.
If sales people sell a lot of digital advertising, they get paid a lot of money. If they sell a lot of print and digital advertising, they get paid very good money. If they sell only print, they don’t get paid a lot of money.
Sales training and digital fluency starts with senior sales leaders.
Digital fluency starts with the most senior manager and his or her team. Sales teams follow the leader. In strategy meetings, sales meetings, and on sales calls. While training in specific areas is certainly complemented by a high level of specific sales training, confidence in our ability to sell digital media can’t be delegated.
Fundamental sales management.
This should be the easy part. It is not. Benchmarking where you are today and measuring progress against a 50% growth rate is discipline and enlightenment. It is hard work. It covers many different digital disciplines with different rates, cost of sale models and ad models. But by breaking down the myriad growth opportunities on digital platforms, you can create and visualise building blocks to getting to the goal.
An example: If your newspaper.com Web site is selling out 50% of the sliding billboards on your home page at US$2,000 a day, that ad position is producing US$30,000 a month. An 80% sell-through rate on the same ad position is generating US$48,000. Revenue improves nearly US$200,000.
Selling digital advertising on your newspaper.com site is not going to get you to 50% growth. Find a way to sell ad impressions outside of your newspaper.com site or sites. Measure it closely, as well. It usually comes with lower CPMs.
Small and medium-size businesses believe they must have a search component included in their advertising strategy. They are right. Acknowledge that it is a low-margin business. Then mix search with display and increase the effective CPM. There’s a reason Google is where it is.
It is hard to argue, based on directional traffic increases, that mobile isn’t the platform of the future. Tablets are included in that future. What does that product line contribute to your growth rate?
Happy New Year. I read somewhere recently that fireworks look beautiful during the day. Let’s resolve to put on a show in 2012.