Riding out the Crunch

Chaos. That’s the word I’m using to describe steps that have been taken across the industry by agencies and sales organizations alike in the past few weeks to position Internet advertising companies for profitability.

If you haven’t placed a call to a sales organization lately to find that — surprise! — your favorite salesperson has been let go, you probably will have this experience very soon. You may also get calls from sales reps and media professionals who are concerned about their jobs and are looking into other options. Maybe you might be concerned about your own job. Whatever the case may be, it’s important to realize that the online advertising industry is going through a fairly rigorous shakeout. As such, media buyers need to make some adjustments to deal with this shakeout and minimize its impact on the pieces of business they handle, as well as on their respective agencies, in general.

Here are some of the things media buyers can do to smooth out the rough spots:

  • Update contact lists. Ask the sales reps with whom you have pending business to provide additional contacts at their organizations. Not only should you have the name and contact information of a sales rep who can cover for your rep in his or her absence, but you should also have information for your rep’s manager. This will minimize the risk of someone dropping the ball if your rep ends up a victim of layoffs.

  • Build in some “wiggle room” in deadlines. If possible, pad your firm client deadlines so that any deliverables that arrive late from sales reps will not negatively impact your client’s business.
  • Check up on all media vendors. Watch the news sites, especially The Industry Standard, Ad Age, Adweek, and even FuckedCompany. If you see anything in the trade press that might indicate a not-so-healthy media vendor, ask your sales rep to address any concerns that you might have.
  • Avoid using up-front payment as a negotiating tactic. In some cases, agencies have been known to offer up-front payment in order to secure the best possible deal. It may be wise at this point to suspend use of this tactic, given that once a media vendor declares Chapter 11, your agency will most likely find itself fighting for pennies on the dollar in court.
  • Ensure that your risk is minimized with respect to high-risk clients. If you are working for any clients in the dot-com sector who are struggling for profitability, make sure that they are paying you promptly for media expenditures made on their behalf. You may want to consider having your media vendors bill any troublesome clients directly to minimize your agency’s exposure to liability.
  • If you are in a position to do so, help out your fellow online media professionals. Take note when reputable sales organizations tell you they are hiring. Should one of your favorite reps call you and ask you about opportunities, you will be in a position to help. Offer to forward risumis and write recommendations. If you are able to hook up a good sales organization with good people, it can only strengthen your relationship with both the organization and the individual.
  • Keep working on case studies that demonstrate quantifiable success. As the quest for profitability takes its course, ad-supported companies will be looking for agencies that can demonstrate the success of their online media campaigns. If your agency can put case studies into the trade press that show remarkably improved acquisition costs or significant increases in purchase intent, for example, your agency will get more inquiries and leads.

Yes, folks, we are in a crunch period. No doubt about it. But if we all can keep our heads, minimize our risk, and make smart business decisions, there’s no reason why we can’t ride this out.

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