Doing the Biz Dev Tango: Part I

“It was a tumultuous time. The clear soda craze was sweeping the nation; the Internet showed us what some nerds think about ‘Star Trek;’ and the domestication of the dog continued unabated.” — Homer J. Simpson.

When I first started buying online advertising, as I mention in my inaugural piece for this column, it was a simpler time: you went to a site on behalf of an advertiser with some money and an idea of what you thought you’d like to see on the site.

Now, there’s CPC, CPM, revenue sharing, and hybrid deals using all three. As online agencies continued to evolve, so too did the kinds of buys they were willing to commit.

But the one thing agencies stayed away from was business development deals.

Advertisers, in their quest for bigger and better placements with large publishers, started cutting huge deals with a myriad of placements, and they were cutting these deals direct.

Agencies didn’t want to get involved because these business development deals were non-standard and involved more legwork for an already bandwidth-challenged media department.

Many of these deals are entered into at the behest of VCs, who don’t know much about online advertising and marketing, but know that Yahoo and AOL are big recognizable names that, if mentioned in a press release, can generate a lot of buzz among the investment community.

But over the last two years, many advertisers that entered into these multi-zillion dollar, multi-year contracts have not seen them pay out.

The lure of the web has been that there is unparalleled accountability. Yet large sums of money have been laid at the doorsteps of some sites without any prior proof of performance. Now some of the results are in, and they aren’t always so good.

The reason for this in most instances is because no one bothered to ask the question, “Does this deal satisfy our marketing objectives?” Most of the biz dev deals that are cut out there are really nothing more than giant media buys that are long term and big money.

Re-introduce the agency. With so many business development relationships consisting of large money and substantial media placements, some advertisers have turned back to their hired guns for committing regular media buys and are asking their assistance on the business development front.

The agency is now being asked to apply the same acumen it does in evaluating standard media planning and buying to evaluate their more extensive publisher relationships.

More and more dotcom clients are emerging on the scene with little or no prior online advertising experience. Since those that do are already working for earlier established online properties, the online agency becomes the source of knowledge and experience for how to best assess what gets put on the table for a business development buy that the client can lean on.

What the agency has to offer in this situation is not only the experience with evaluating the quantitative aspect of a deal, but they often times have the relationships with the publishers necessary to start this process. Also, the agency can offer its experiences of buying standard media from a publisher and what the ins and outs are of how that site works in negotiating, as well as how that site has performed in the past for other advertisers.

That isn’t to say the client is always perfectly comfortable with the agency taking on this role. Some times a business development deal involves aspects of incorporating a client’s brand, and brand management has always, traditionally anyway, been the purview of the brand manager on the client’s end. But, with effort on both the parts of the client and the agency, the client gets a better understanding of how the media works and the agency (media) gets a lesson in the ethereal practice of brand management.

Now that takes care of the preamble.

Next week look in for an overview of just how the business development tango works in application: Who hold the rose in their teeth, how not to step on your partner’s toes, how to dip, and how not to drop your partner when you do. So tune in again next week; same bat time, same bat channel.

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