This is the final article in Richard's four-part series on creating an advertising program for small sites. Today's focus is your sales strategy: presenting your value proposition, determining pricing, making the pitch, and identifying prospects.
My article this week is the final installment in my four-part series on creating an advertising program for small sites. Today's focus: the sales strategy. This includes presenting your value proposition, determining pricing, and making the pitch. Because you need prospects to sell this offer to, we'll also talk about how to find them and who not to go after.
The Value Proposition
Let's describe what the value proposition should be by first saying what it should not be. A banner ad, a direct email mailing, and almost every other online ad vehicle have a perceived value that has already been determined by what everyone else is charging. No sales speech, however pretty and convincing, will change that. So don't ever sell either a sponsorship or a directory listing in terms of raw impressions.
Instead, present your offering as a package of online ad vehicles all designed to work synergistically. And present the exposure in terms of your total web site audience. You can legally do this because, as you may recall, in both models we've built the site in such a way as to make the directory listing and sponsorship accessible from every page of your site (unlike a banner ad).
Of course you want to set the price of your offering so that you cover expenses and make a profit. But to come up with a price, I recommend looking to the print advertising world. Find magazines that cater to the same audience your web site does. See what they charge for a full-page color ad in one issue.
If you are pricing a directory model, divide the cost of a full-page color print ad by 12, then charge that amount per month. For example, if a full-page ad costs $3,000, charge $250 per month for a directory listing.
If you are pricing a sponsorship model, charge a price similar to the full-page print ad per month for your offering. So if a full-page print ad costs $3,000, charge about $2,500 per month of sponsorship.
These are just starting points, of course. But both these cases allow you to say to your advertisers that for the price of a print ad they're getting real-time interactivity with your target audience and the ability to refine the advertising as the campaign is occurring -- two benefits that print can't deliver.
Since I've never actually sold advertising, I consulted a buddy of mine who has: Rob Van Slyke of Idea Integration. Rob is now on the other side of the table, planning and executing online campaigns for Fortune 100 clients. But at one time Rob sold the type of online advertising we've been talking about. Here are his tips for getting people to buy your offering.
Know whom you're talking to. Is the person you're pitching to an experienced media buyer or a newbie? They will want different information. The media buyer just wants the facts. A newbie will need explanations of the offering. And the explanations will probably need to be in terms of conventional advertising (e.g., "This is like a print ad, only better because you can do X, Y, and Z.")
Create inventory and structure deals so that you can offer freebies. It is always better to sell at full price and offer extras than to discount the price of your offering. So make it easy to throw in a banner ad here or a direct email there.
Make the buyer's life as easy as possible. Offer real-time reports, easy-to-understand rate sheets and media kits that can be cut and pasted into a media plan, value-add help in choosing sections/sponsorships (consultative sales), and frequent communication/discussion about adjustments and tweaking.
Legitimacy inks deals. If advertisers see competitors advertising, they'll want to advertise, too. It reinforces the legitimacy of your offering. So you might want to seed the process by giving a few key companies a good deal to get their names on your client list.
The key to finding prospects for a directory or sponsorship model is to understand what type of company best benefits from this type of offering.
A company selling $5 widgets isn't the kind of company for which this type of ad model is well suited. If you priced your offering as I suggested, such a company would have to sell hundreds of products a month just to afford the advertising.
Instead, focus your efforts on finding companies that are selling $5,000 widgets. This way, just a single sale can pay for the entire advertising run. (In fact, make this point in your pitch to them.)
I'm out of space for this week. And I'm afraid there won't be a next week. I've decided to resign my position as a ClickZ columnist. This is my last column.
Things are really taking off with my company, Booklocker.com, and I need to devote the time to that endeavor so I can retire a millionaire at age 35.
Thanks to everyone who read my ramblings these past nine months. As always, you can reach me at email@example.com.
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After five years of telling others about how to spend their marketing budget online, Richard Hoy recently left the employ of this influential publication to see if what he's been blabbing with his big fat mouth all these years really works. He is President and Co-founder of Booklocker.com Inc., an alternative to traditional publishing that helps authors realize profits of up to 70 percent of sales by combining electronic publishing with Internet marketing.
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Hong Kong, 8-9 December
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