SPECIAL REPORT: PART I

Digital Turning ‘Broadcast’ Sales Upside Down

The great challenge for local TV is not only to create compelling digital products and services, but to find and train people to sell them. Station groups are stepping up those efforts, hoping to latch on to some of the dollars that are migrating from broadcast to digital. "Digital, social, secondary channels, websites, mobile – it’s literally a laundry list that each sales rep needs to understand, then master himself," says sales consultant Adam Armbruster. Part II of this special report tomorrow will address integrating new programmatic or automated selling platforms with existing sales, traffic and billing workflows. Also see today's Open Mike on sales compensation for new hires.

The digital advertising revolution sweeping through the media world has reached local TV, upending the lives of broadcast salespeople, requiring them to do more and learn more, while sometimes earning less.

In markets of every size, stations and station groups are creating and offering a host of new digital products to prospective and long-time clients to keep pace with the invasion of digital and other media on their turf.

The broadcasters are re-emphasizing training, creating new digital-only positions, hiring digital specialists and even establishing whole new units to sell digital products and consulting services that often have little or nothing to do with selling traditional TV time.

It’s happening everywhere. In Columbus, Ga. (DMA 126), NBC affiliate WLTZ launched a digital ad agency last April called Alligator Digital – a move inspired by other stations that have done the same thing, says WLTZ general sales manager Fred Steppe.

“It’s a separate company and I have separate sellers who are not competing with my broadcast account executives,” Steppe tells TVNewsCheck. He declined to divulge how much money the new company has made since its launch, but he said it’s making some and he’s hopeful for more. “We’re still perfecting the pitch,” he says. “It’s been a real learning process.”

Indeed, the local TV business appears to be in the midst of an industry-wide learning process when it comes to ad sales. It is a massive conversion to the new world of local digital selling. Just this year, NBCUniversal took steps to train 400 of its local and national salespeople on the ins and outs of digital sales.

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Training sessions were held in 10 different regions, drawing salespeople from all of the NBC and Telemundo O&Os, says Frank Comerford, chief revenue officer and president of commercial operations for the NBCUniversal Owned Television Stations. The training was actually conducted by New York-based Digital Media (DM) Training.

“We just spent a lot of money and time [on] training,” Comerford says. “We thought that it would make sense to have every single salesperson in our organization – both NBC and Telemundo in the local markets and in the national rep firms – trained.”

The company’s goal: To have everyone  “IAB-certified” – or, in other words, to earn professional certification in digital advertising sales from the Interactive Advertising Bureau.

NBCUniversal’s focus on digital is nothing if not timely. Analysts are declaring 2015 as the year when online will finally overtake traditional local media. “This year, online media shimmied to the top of the local media food chain, appealing to the largest percentage of local advertisers and taking the largest share of ad budget,” says one report issued last June by Borrell Associates, with the title “Local Advertising Hits a Tipping Point.”

“Over the next 12 months,” the report said, “the gap will almost certainly widen to the point that all traditional advertising channels – print, broadcast, outdoor and mail – [will] begin to look like niche support mechanisms to a local business’s digital marketing plan.”

An earlier report from Borrell – issued last January – predicts that “digital advertising at the local level will grow 42% [in 2015]. At that rate, it would account for $2 out of every $5 spent by local advertisers.”

The result is a tidal wave of change washing over the local TV ad sales business, with stations facing a new set of challenges, including adding and selling a lengthy menu of new digital products and services, including website management. At the same time, they’re trying to stave off competition from a host of digital competitors, while working to maintain their traditional clients’ spending on old-fashioned TV commercial time.

“It is a completely different time,” says Jim Doyle of Jim Doyle & Associates, a TV sales consultancy in Sarasota, Fla. “The industry has to be much more oriented toward creating demand than managing demand,” he said.

To create demand, local ad salespeople are now selling an array of products that are taxing their ability to keep up with it all. Increasingly, local TV salespeople are being asked to position themselves as digital-advertising consultants who can help local SMBs (small- and medium-sized businesses) manage their digital portfolios, which includes assisting local businesses with their Facebook pages, managing their profiles on sites such as Yelp or Angie’s List (part of an overall “presence” management effort), optimizing searches, guiding them on geo-targeting strategies, choreographing e-mail blasts and everything else that local small businesses are dealing with digitally.

“[Station salespeople today] are drinking out of a fire hose of new product offerings that their companies are rolling out. Digital, social, secondary channels, websites, mobile – it’s literally a laundry list that each sales rep needs to understand, then master himself. [Account executives] have gone from one product to, I kid you not, 12 to 20 products that these folks are now responsible for selling,” says sales consultant Adam Armbruster of New Jersey-based ESA & Company.

“For a local AE, it’s harder,” says WLTZ’s Steppe. “And for a manager it’s harder to find those people who are really good at it because we’re not paying AEs what they used to make. …A lot of stations I know are paying less commission now.” [Editor’s note: For more on recruiting and compensating account executives in the digital age, see today’s Open Mike by sales headhunter Laurie Kahn.]

To be successful in the new world, local TV salespeople will have to embrace the faster pace of doing business, the experts say. “People who have been sales professionals or AEs the last 20 years may have a hard time in that new world,” says B.J. Boyle, vice president of product management for Pittsburgh-based Matrix Solutions, which sells CRM (or customer relationship management) software designed to help advertising salespeople stay organized.

In a local media world that grows more complicated everyday, organizing software can come in handy. “I think it’s wise for a station to embrace CRM tools just to keep track of what you’re saying to every customer – what they want, even their birthdays and favorite drink,” says Armbruster.

Account executives use CRM to manage their account lists and keep track of orders and prospects. Sales managers use the software for the same organizational capabilities, but also to keep tabs on their staff’s activity levels. And while sales managers have long required account executives to keep records and turn in activity logs, some AEs feel the CRM systems just make it easier for managers to keep an eye on them.

“Great salespeople have complained about paperwork for as long as there have been pens,” says Jim Doyle. “I don’t think it’s necessarily a new issue. The reality is that in a perfect world, none of us likes anyone seeing what we do.”

Even as they worry about the inroads digital is making in local media markets, salespeople also say they’re optimistic that they can manage both their traditional businesses and the new opportunities presented by digital. “At the end of the day, we’re still a TV station,” says Steppe. “We still have to be able to entertain and put on a good news product and run commercials and traffic them the right way. We have to remember our core business. But there’s an opportunity for us to be able to help our clients grow with digital.”

For an account executive in the new world, the biggest challenge is multi-tasking, Steppe says. “They’re not just selling television.”


Comments (17)

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Mary Ardito says:

September 23, 2015 at 8:57 am

The IAB is some organization – there is always some story about digital out there touting its virtues. Is there any marketer out there using ANY common sense? Digital is definitely a new shiny toy, but not the end all be all answer. Dig a little deeper and you will find the digital gurus speak about “scale” and “aggregation”. This is all due to the need for it; aggregation because the sheer amount of it distracts you from noticing the scant value of the pieces of it.

Yes, 1,000,000,000 pennies is equal to the value of $1Million dollars – but try and walk around with 1,000,000,000 pennies, or better yet – try and buy things with them – cumbersome not to say the least.

    Gail Albertiny says:

    September 24, 2015 at 7:43 am

    You read my mind. I advise all clients, buy TV, but do not spend a nickel on banner ads or “digital marketing.” Banner ads are completely worthless. No one in TV is talking about bringing more or real value to the client. I tell clients if the TV sales person uses or sells off the word “impressions”, run for your life. It’s a useless metric they use on unsuspecting clients. The only thing that matters is a unique visitor that leaves the broadcaster’s website and goes to a client’s website. But sales people are scared to death of this metric because it proves the absurdity of digital advertising. I have clients who have paid for banner ads and I show them that they receive virtually no traffic from these ads, much less sales. And there is an inescapable conflict. If a banner ad causes a visitor to leave the broadcaster’s website and go the client’s site, then that impacts the broadcasters site. I don’t know what the solution is. It’s not my problem. Good old fashioned Google SEO or a well crafted Pinterest page will crush the results of any TV station website. It’s easily provable and I have taken the wind out of many a salesman’s sails many times.

Gregg Palermo says:

September 23, 2015 at 9:09 am

Tidal wave of change. Yep, harder and faster. TV stations no longer are a license to print money, nor have they been for decades now. Pity the advertiser who needs dozens of solutions to reach the same targets who got their ads from two or three sources in days of yore.

    Brian Bussey says:

    September 24, 2015 at 4:03 pm

    actually, we print money every day… printing it right now as we speak. will be printing it tomorrow.. the are major structural problems in the digital space. until they are addressed, broadcast is perfectly safe. after they are addressed, 90% of all the impressions will be controlled by local broadcast stations. we still win. again. get used to it.

Michelle Underwood says:

September 23, 2015 at 9:54 am

If you like paying for robot sites seeing your ads and not consumers, digital is the place for you.

Sheila Giorgetti says:

September 23, 2015 at 10:59 am

The other big challenge is educating the client. Small to Medium sized owner-operator businesses who have been the traditional TV and radio clients are overwhelmed as well. They are being called on by 10X the local media reps for all digital offerings plus the traditional TV, radio, and print. Every rep presents a different solution with different data to back up the buying decision. What I’ve seen is confusion on the part of the business owner on how to measure success, which leads to unhappy clients because they expect the same results as they were used to from traditional advertising. Monthly Click-Through reports are not cash register sales. So client education goes hand-in-hand with AE training, IMHO.

Grace PARK says:

September 23, 2015 at 12:49 pm

Sigh.

Ron link says:

September 23, 2015 at 2:14 pm

Do you guys ever get tired of listening to your own BS!…clearly what the industry is doing is NOT working….in large degree because you rely on pseudo intellectual experts who have NEVER sold an ad in ANY medium in the last 15-20 years for ANY length of time and simply do NOT understand the reality on the street..For God’s sake WAKE UP before you all lose your jobs!…. 772-332-8300

Matthew Castonguay says:

September 23, 2015 at 6:08 pm

The problem with the Borrell analysis is not that local digital is not surpassing traditional outlets, it may well be now…but to say TV is becoming ancilliary is not right. The bigger local accounts that are on TV are not going to be spending more on digital for a long time – it’s the longer tail of smaller local businesses that mostly NEVER WERE on TV that are driving the shift. Doesn’t mean it’s not an opportunity…it is. A TV station can now shoot for 3,000 clients instead of 300. They’ll be smaller, but collectively, especially if stations deliver what they want and they become evergreen, they could really matter.

    David Bisceglia says:

    September 24, 2015 at 1:14 pm

    Actually, Rocker, the opposite is true. In a survey of 7,228 SMBs earlier this year, auto dealers (who are the big dogs you mention) were MORE likely to say they planned to increase digital. Of all local businesses, 62% said they planned to increase digital spending in 2015; of auto dealers, 74% said they planned to increase digital. Sorry…..don’t shoot the messenger. I’m just relaying what those dumb SMBs are telling us.

    Brian Bussey says:

    September 24, 2015 at 4:08 pm

    my big car dealers are bigger than your big car dealers. (trust me on this one) and that is because Houston’s public transportation is about 50 years behind where it should be. My dealers would not dream of coming off broadcast because it is so fricking profitable. I don’t need price and item. I don’t sacrifice profit to generate traffic. I don’t have to.

Jayson Siler says:

September 24, 2015 at 6:39 am

To paraphrase Mark Twain, the reports of the death of TV are highly exaggerated. Digital display CPM’s are in free fall for a good reason–there’s no value there. TV remains the premiere ad vehicle for rapidly building reach and generating awareness. As of Q2, the only digital sector that shows dynamic growth is paid search. Other digital sectors are still scrambling to prove their relevance to the market place.

Grace PARK says:

September 24, 2015 at 9:41 am

People, the same energy that drives ad blocking also drives ad skipping. There simply is no market for unwanted commercial messages. There never has been, and the only reason it has lasted as long as it has is that readers/viewers/users didn’t have any choice. The mass media advertising demands tolerance, and that’s a lousy model for business.

David Bisceglia says:

September 24, 2015 at 12:52 pm

Interesting how history repeats itself. Consider this assessment from media critic Silas Bent: “Ten years ago newspaper publishers and editors ridiculed NEW MEDIA with broad grins. It was a plaything, quite outside the purview of an industry (that had become) a Big Business. That this short-sighted attitude persisted, even after the dissemination of news by NEW MEDIA began, was surprising.” Here’s your kicker: Silas Bent said this in 1928, and instead of NEW MEDIA (my words) he actually said “radio.” If ol’ Silas were alive today, he’d only have to substitute TV for “newspapers” and “programming” for “news” to be relevant 90 years later.

Shaye Laska says:

September 24, 2015 at 1:45 pm

I’d be busy training my sales teams not on what these tools “are”…but instead on how to create client impact using these tools. These digital tools are real and they have true client value. Knowing how to use them for CLIENT sales and profit benefit is the smart start.

Greg Johnson says:

September 24, 2015 at 5:31 pm

The time of a local advertiser to depend on a TV salesperson passed a long time ago. However, there is still fear on the small business level to discover the right solution, an effective solution. TV spot is still good at some things, but is still a shotgun and TV salespeople still dance when they are asked to give an objective answer to ROI. BTW, your digital products don’t do better because they are not competitive with what else is available in the marketplace. The poor sellers are asked to sell inferior products to their clients. Is that where you would spend your money if it were your business. All of this discussion is about what broadcasters are doing to compete in digital. It has not been engrained in the culture, meaning discussed as much as TV, and there is no R&D. The local numbers that Borrell is referring to are co-mingled with players you can’t compete with, not because you can’t, you just don’t want to. I wrote a blog the other day and suggested that TV stations consider selling all digital, including multicast, to third parties who were dedicated to product development, R&D, strategic partnerships, contextual and geo-targeting, and search or simply turn off all those web and mobile distractions so you could focus on what you are dying to get back to which is new business development. If TV stations are clamoring to sell unused spectrum, a linear opportunity that they were supposed to understand, why not save all the money on web and mobile. You see the PV/UV numbers every day and they won’t sell enough revenue to keep you interest. NBC can spend a day training salespeople on the nuances of digital and believe that will make a difference. It makes no difference, none. The cultural shift that has been going on for fifteen years now about how build a competitive advantage with this new player called digital. The white elephant in the room is that your web sites are deplorable and I have never heard a professional who was considered web product design say anything even that nice. Maybe “cord cutting” will be a windfall for broadcasters.

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