Outsourcing Sales

Week after week, this column talks about Internet advertising sales: organizing ad sales teams, hiring and managing ad sales people, making sales calls, keeping customers sold, and so on. But what if you don’t want to run a sales operation? The Internet ad space offers a wide range of options for sites that want to partner or outsource their sales operations.

There is a variation for almost everyone. But not all of those options are created equal, and even the best firms are not equally good choices for every site. Understanding the relevant factors that drive a “build or buy” decision around sales capabilities, and then using that knowledge to weigh the options that best suit your firm’s needs, are critical steps to making a choice that will work for you and build your business.

Be Realistic

The most common mis-perceptions we hear are the unrealistic expectation that a third-party sales operation will want to handle your worthless inventory and leave you the high-value products to sell. Or that it will allocate significant sales resources to a site with little or no inventory. Or that you can hire a reputable sales firm to build your brand in the pre-revenue stage, taking the sales back in-house when the potential for returns gets interesting.

None of those are realistic goals (though we hear that line of thinking again and again). Ad sales firms are businesses, subject to the same economics as any other business. They are in business to make money, either by selling enough inventory to generate sustainable (and profitable) commissions, or by charging their sites a retainer for services offered. Or sometimes (rarely) by handling sales as a loss leader on the more profitable and heavily marked up marcom and promotions earnings.

If you don’t have enough desirable inventory to make money, no third-party sales firm can dedicate sales people to your offering. You may find a firm offering to carry your line, but don’t expect a team of cracker-jack sales pros pounding the pavement telling your site’s story. If you can’t afford it, they can’t either.

There are firms that will bundle your inventory with that of other small sites, and this service can be a great option for a small publisher. Just don’t delude yourself that you are replacing a dedicated sales force in that arrangement.

Your sales partner is selling aggregated and largely undifferentiated inventory according to demographic criteria, they are not promoting your brand to advertisers. These arrangements are ideal for the site in start-up mode, with other primary revenue streams, or one which has other reasons not to build a sales force, and these firms are great at turning inventory into revenue. Just set expectations appropriately, and know they can’t invest the time to build your brand among advertisers as a dedicated sales team would.

Know the Field

There are a lot of firms with distinctly different business models operating in the Internet ad field; not all offer the same services, nor do they have the same terms and conditions relating to signing new sites; nor are they all interested in handling your site’s inventory. Over the next several weeks, we’ll be taking a closer look at some the variations on the outsourced ad sales theme, to contrast the very different sales arrangements possible today, and what a site must do to have success with the various models.

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