Saving for the Fire Sale

Before I get started here, I just want to take a moment to make a statement to the community in regards to last week’s piece (“Network Update,” 3/28/00). There were two errors in it, one an omission and one an oversight. First, the omission.

Though it is impossible to mention every network of sites out there aggregating and trying to sell inventory on the web, I left out one particularly prominent one.

I omitted Flycast, a major network that I have done lots of business with. I recommend that anyone putting a campaign together explore the opportunities here. The pros are that Flycast is inexpensive relative to most other networks and will do mid-campaign optimization of the advertising, weeding out the lowest-performing sites and heavying up rotation on the better performing ones. Cons are that it is sometimes difficult to get site-by-site performance data at the outset.

Second, I must bring to light an error. In the piece last week I mentioned that one of the cons of BURST! Media was that you couldn’t cherry-pick the sites you want to buy. I was mistaken. An advertiser CAN, indeed, select a specific site from within the network on which to run a campaign. ClickZ regrets the error, but I regret it even more. To my friends at BURST!, sorry about that, y’all.

Okay, now on to the real issue this week.

The Fire Sale

Over time, one of the things I have noticed in planning and placing online media is the number of great deals that suddenly become available on a number of sites during particular times of the month and the year.

This past week I received several calls from sites with some extraordinary inventory rates, rates one doesn’t often encounter in the regular course of planning and buying online media.

The first few times this had come to my attention in the past, I wondered, “Why are they calling me now with this deal, two weeks after I’ve already put a plan to bed?”

But I have finally noticed the pattern. Now, this is something I have not even shared with my own agency yet, but I’m going to share it with all of you now.

Is everyone listening?

At the end of every month, and at the end of every quarter, many sites approach advertisers and agencies with great deals on what is often exceptional inventory. The reason for this? They gotta make numbers.

As many of you know, every sales-driven organization has a certain goal that the greater powers-that-be expect to achieve in a given period of time. Though many of them have monthly goals, they all have hard quarterly goals that need to be met. If by the end of the month, those numbers aren’t achieved, the fire sales begin.

It isn’t unlike regular business. Think about the “end of year” and the “everything must go” sales that you come across in general retail. This isn’t because, out of the goodness of its heart, a vendor suddenly feels compelled to offer you a break. There are revenue goals that must be met and inventory that has to go in order to avoid a certain amount of tax liability. Sites operate within similar constraints.

The site is left with income levels to attain, or a glut of inventory to dispense with, and so, to realize that revenue in a certain month or quarter, it will offer up the bargains.

Now, this isn’t something you can always count on from month to month, but it does happen with enough regularity that some planning can be done to take this into consideration when putting together a buy for your client.

So, how do you plan on something like this?

I’d recommend something I used to do for a retail banking client I once worked for. For the year, we would have a certain percentage of the media budget go into a contingency fund and hold it for any kind of out-of-the-box, last-minute opportunity that arose. These would be event sponsorships or OTO (one-time-only) programming that might come our way outside of the planning cycle.

Do the same for your online plan. Set up a contingency budget out of the overall budget plan for these fire-sale opportunities. How much is enough is always hard to say, as it depends on how much you have in total and what the immediate objectives of the plan might be. But suggest the possibility to a client.

To be sure, if you don’t have experience with these kinds of opportunities, it can be difficult to project results against the savings you may realize, but do your best. This will then help you make the case to your client that by doing something like this, they could increase efficiencies. It will also show them that you are smart and that you are thinking strategically about how to spend their money.

Since the opportunities are uncertain, don’t keep aside too much money, and have another site or two in the wings that you can be ready to move on right away, so that the budget still gets spent in the right places at the right time.

Oh, and shhhhhhhhh! I’ve already got a bunch of reps out there that want to kill me. Don’t make it worse by telling them where you heard this!

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