As I put together a proposal today for a local business I had an “ah-ha” moment. The complexities of digital media being sold in traditional media companies has been centered around the wrong thing….margin. There is real fear that we will just be shifting dollars, and what I’ve found is actually the exact opposite. Digital dollars help secure and grow traditional revenue….proven time and time again.
Traditional media companies (print, radio, broadcast) have had the advantage of keeping the majority (if not all) the margin of what they were selling. Traditional media is what it is, an ad in the section of the paper (circulation), a commercial spot in the 5, 6,or 11pm newscast, or prime programming, or a spot in a commercial break between songs. Digital Media is not bought, sold, or consumed the same way as traditional media. It’s targeting capabilities are unmatched. Where can you target a specific age, gender, behavior profile, send someone a coupon as they get a mile around your business, or better yet, walk into your business? There is real value in traditional media, no one is disputing that, but when and if you are looking to build digital revenue, let’s look at this a little different. Digital Media Requires New Thinking on everyone’s part….Sellers, sales and station management, accounting, etc.
Traditional media companies struggle with the billing, the margins, and the “contra revenue” None of the above “fits” the “traditional model” and that’s foreign….”Why put all this effort and energy into the small dollars when we could be focused on the big dollars”? Real thoughts that I totally understand and sympathize with.
I’d like to challenge traditional media companies to think different about their digital businesses….You are essentially creating a digital agency inside of your “business that has always been”. The value of what you are developing lies in your people and the skills they have to educate, sell, and execute digital campaigns for your local clients. I’m not talking about just your digital sellers…this includes legacy sells reps as well. Traditional media companies have the advantage of long-standing relationships….Why do you think Google, Yahoo, and other vendors want to partner?….because you are local.
Local businesses are speeding digital dollars, why not with you? It’s a competitive advantage. Reach and stretch outside the box of your company website and explore all the digital product and targeting capabilities and options that are available. There is a lot of competition in our markets. Why not go for a larger share of wallet and take the lead?
It’s back to basics….what are your client’s goals, and how do we achieve them? Your digital strategists/consultants (that’s what I like to call them) are hopefully sophisticated, strategic campaign specialists. Understanding your client’s needs, then being able to pull out of your bag of tricks: a pay per click solution, Pandora, YouTube, mobile ad networks, Rich Media ad networks, pre roll ad networks, and the list goes on and on. Who else can effectively execute a campaign with all these “products” It’s a skill…a valuable skill to your media company and your clients.
Think Outside the box. Your billing is on a monthly service you are providing your client. No one works for free right? So, charge a % of your advertisers total spend….JUST LIKE AN AGENCY. Functioning Agency style inside of your media company is the win-win solution. Don’t get hung up on the fact that you only keep 10-30% of your client’s total spend. That’s OK! That’s what running a digital business is! It’s the future of advertising. It will only get more sophisticated and it’s important for us all to keep up. The dollars will follow…