While many media owners do their own sales, others choose to outsource this function. What are the benefits? Media owners are different to most other businesses in that they have two customers: individuals who consume media (their audience) and advertisers. Both are extremely important to the media owner. The one cannot exist without the other: a brand needs an audience to be able to attract advertisers.
Media owners are under huge pressure to offer compelling content that will be informative and entertaining to draw audiences. This is normally their area of expertise and if the pressure of generating the advertising revenue is outsourced, it allows for a focussed dedicated approach to building audiences.
To outsource your revenue to a third party can be a daunting concept. Will a media sales house give your brand top priority? Will they be able to represent your brand with the same passion as you would? Can you trust them? Will they have the same ethic of service delivery than you would have? Will they sell your brand at the right price? Would you be able to generate a higher turnover if you sold your brand yourself? Will you and the third party agree on the sales strategy? Will you both speak to the industry in one voice?
These are candid questions for a media owner to consider before a decision is taken on outsourcing sales. However, if a transparent strategic partnership is formed between the media owner and the media sales house with clear objectives for both parties set out in a service level agreement, a very successful business partnership can be formed.
One of the major considerations that any media owner needs to balance is cost versus benefit. Will the cost of a sale be lower if sales are outsourced to a sales house?
Next is the matter of access. Could a single media owner, with a limited audience, be able to meaningfully add value to any single advertiser? The time-starved media strategist at an advertising agency often prefers dealing with a media sales house due to the latter’s ability to represent a variety of products and brands on offer to the advertiser. Hence, the calibre of sales representation increases exponentially due to the professionalism of the staff and the quality of the products being offered.
A media sales house offers media owners access to an administrative system, including a traffic system for the booking and billing of advertising campaigns and the monitoring of inventory allocation. The sales house is tasked with the responsibility of collecting advertising revenue. An agreement can also be reached between the media sales house and the media owner for a guaranteed payment within a certain time period, which benefits the media owner in refining cash flows.
A trade marketing department normally exists within a media sales house and is of great value to the media owner in assisting them with the positioning of their brand and the storyline to the industry.
Access to research data, both qualitative and quantitative, forms part of the sales pitch to advertisers and high level presentations can be compiled by the research department within the
media sales house. The research tools used in pitches can be expensive for any single media owner.
Sophisticated customer relations management systems are often used by media sales houses to assist in forecasting advertising revenue, monitoring sales activity as well as reporting on actual sales.
Some media sales houses place enormous importance on staff training and development, which benefits media owners by having a professional sales force representing them in
The concept of media sales houses representing media owners, both locally and internationally, has become very popular in the past decade due to the value it offers media owners. The most important benefits are the reduced cost of sales as well as the focus it allows media owners in growing their audience and delivering compelling content. n
Lizette Anderson is a sales director at Mediamark for the coastal divisions.
This story was first published in the February 2013 issue of The Media.
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