Media businesses must evolve to meet the needs of their changing marketplace. Most media brands seem to be expanding their sense of self-identity from that of a single medium, a TV station for example, to that of a content-driven communications organization. This evolution allows media companies to provide advertisers with integrated, cross-platform solutions that are both more efficient and more effective in delivering the right audiences to their marketing campaigns.
“If you keep doing what you keep doing, you keep getting what you keep getting.” Chris Berry, SVP of iHeartMedia’s 24/7 News Source used this aphorism from his grandmother to kick off a keynote discussion about the future of local ad sales during MFM’s annual conference in May. Berry was joined by Cox Media Group’s Neil Johnston and Rob Weisbord from Sinclair.
The overarching message from these three industry leaders should not surprise you. It’s that media businesses must evolve to meet the needs of their changing marketplace. What caught the attention of Media Finance Focus 2015 attendees was the absolute numbers they, and other conference presenters, cited. Media businesses that fail to act now could find themselves on the wrong end of that question made famous by Dr. Phil, “And how’s that working for you?”
Both Weisbord and Johnston spoke at Borrell’s 2015 Local Online Advertising Conference (LOAC) at the beginning of March. When I originally reached out to them, we thought they could use the same presentation preparation for both events. The premise was to look at strategies that are helping media companies capture their share of the rapidly rising budgets for digital advertising. These budgets are generally increasing at the expense of traditional media spending.
Berry observed that most media brands seem to be expanding their sense of self-identity from that of a single medium, a TV station for example, to that of a content-driven communications organization. This evolution allows media companies to provide advertisers with integrated, cross-platform solutions that are both more efficient and more effective in delivering the right audiences to their marketing campaigns.
Leverage Your Station’s ‘Super Brand’ Status
Neil Johnston, EVP of strategy and digital innovation at Cox Media Group, provided a real-world example of TV stations making that transformation. Cox expects that 50% of its total revenue will be derived from its digital properties by 2020. “I’m more excited about the opportunities that we have in local media than ever before” Unlike newer, pure-play digital media providers, “traditional media companies are ‘super-brands’ with a strong reputation for delivering audiences and provide media buyers with advice they can trust.”
Cox is well on its way to achieving its digital sales goal. Its strategy for growth is focused on investing heavily in news, traffic and weather, and making sure that this local content is available on every distribution platform, including social media. Reporting on results that had changed even in the few months since he’d addressed the LOAC, Johnston said: “We’ve seen our digital revenue grow in excess of 16% over the last three years. And during the first four months of this year, it was up above 20%.”
Be Ready For Machine-To-Medium Media Buying
Another area that needs to undergo a transformation is the media sales process. Citing market forecasts predicting programmatic ad buys will account for as much as 40% of digital video sales next year, Berry told our attendees: “Most media buying will soon be machine-to-medium. If you invest in separate sales teams for digital, you’re going to increase your selling costs.”
Cox’s Johnston pointed out that meeting the media buyers’ demand for metrics like viewability as part of buying digital media through automated solutions requires complex back-office systems. Those increased costs occur while selling a form of advertising that is already generating lower margins compared to traditional on-air sales. Despite that he advised, “Mobile and digital video are where it’s all at; you have to match your clients’ level of sophistication in your selling strategies.”
Focus On What The Advertiser Needs, Not The Inventory You Want To Sell
Rob Weisbord, COO of the Sinclair Digital Group, agreed with Johnston. “It’s all about the ‘brand in the hand’ in today’s app-centric world. It comes down to what’s best for the advertiser.”
In creating that type of advocacy for advertisers, Weisbord said the organization needs to bring down the walls that can exist between its various assets. This will allow ad sales teams to conduct a “gut check” on which platforms will do the best job in meeting the advertiser’s sales goal. For example, “We know today that if someone buys a Mercedes, and that dealer has their address, we can actually serve up an ad for the homes to the left and the right of the person who bought that car.”
Big Data’s Role Is Getting Bigger
Weisbord’s example came to mind as I was reading an interview TVNewsCheck’s Harry Jessell conducted with Maribeth Papuga, a 25-year veteran of the media-buying world. Papuga recently joined BIA/Kelsey as its executive-in-residence. In this new role, she will be advising the media research and investment firm and its clients on local media strategy and investment.
When asked about the outlook for spot TV sales, Papuga, who most recently served as EVP, local investment and activation for MediaVest, described the need for stations to provide the audience data that goes well beyond the metrics traditionally used for selling spot TV ads. She observed: “I think even on a digital side, locally, you’re going to have a lot of trouble building audiences and building enough revenue if you don’t have the right data.”
The Difference Between Automated Solutions And Programmatic Buying
Another piece of advice from Papuga was to be clear about the difference between a programmatic ad buy and creating automated solutions. To her mind, “programmatic is not the right word to use on the linear TV broadcast side. Automation is.”
In describing how automated systems would come into play, Papuga said: “Stations want to find a way that they can put their inventory out on a broader platform so that people could come in and not shop it, but perhaps see what is available and preselect what they think will work for them. This can be particularly helpful in smaller markets.”
Tying it all back to the importance of data that helps advertisers make smart decisions, Papuga concluded: “I don’t think that serving up ads without having the targetability of audience is going to work in linear until you have the data to support it.”
Gathering Intel From The Front Lines
I was delighted to see the observations from a seasoned media buyer like Papuga track so well with solutions being discussed at the MFM-BCCA conference. Thanks to the advice from more than 150 industry experts and peers including Chris Berry, Neil Johnston and Rob Weisbord, our members came away with some terrific front-line intel for improving ad sales and other key performance indicators.
Janet Stilson, editor of TFM–The Financial Manager, our member magazine, has followed the media sales business for many years. She captured many of our presenters’ insights in an article appearing in the July-August issue. An electronic copy of that issue will be available on our website in the coming weeks. We are happy to share their recommendations as part of our role in serving as the premiere educational resource for the media industry’s financial professionals.
I encourage you to give it a read and to keep this discussion going by sharing your thoughts on how we can improve upon the industry’s local media sales strategies and processes. As I keep learning from MFM members, such sharing helps us to answer questions like the one posed by Dr. Phil with an emphatic “As you can see from our income statement, it’s working very well.”
Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary. She can be reached at [email protected]. Her column appears in TVNewsCheck every other week. You can read her earlier columns here.