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Are Ad Salespeople Doomed? by Daniel Ambrose

Twenty three billion dollars in annual revenue, up from zero in 12 years, will get a lot of attention. That would be Google's last 12-month performance. Of course, Google's business is built on per-click priced advertising, much of it purchased by small customers by credit card through automated systems.

During those 12 years of Google's growth, a whole range of other automated sales systems and advertising marketplaces have been created. Many have died, but new ones are still being created. Google itself is still hard at work trying to build automated systems, after failing with its automated newspaper ad buying system a few years ago. Google now has "Ad Planner" a so-called "market" in beta testing that tries to bring buyers and sellers together. Adap.tv is the latest new one in the video arena.

As publishers and salespeople conduct their personal "what does it mean for me" calculus, many are wondering if automated buying systems will replace the way that advertising has been sold and purchased, supplanting the salesperson with a computer.

I'm here to calm your nerves. Despite the "commodification" of media, salespeople and publishers will still be needed and will thrive for the foreseeable future. It's true that salespeople will need newer skills to be stars in 2012 than they did 20 years ago. But sales will still be made, and increased, by building relationships and serving customers.

How can I be so sure?

My initial thinking on this started with the nature of the act of planning and buying. As advertisers put increasing pressure on their advertising agencies and their advertising departments to cut costs, the staffing to make informed decisions has been cut back. The surprising reaction to this has been to rely even more on professional relationships with sellers to configure proposals, and a tendency to buy and rebuy using the same trusted relationships.

I could write a book on how this relationship between buye r and seller works well for both sides. But you won't read it. You still think, probably, that the trend to automation and measurability of results will eventually drive salespeople to open bed-and breakfast inns.

So let me suggest two parallel scenarios that are relevant and instructive.

If you read the Pulitzer Prize winning history of the oil business, "The Prize," you would know that relationships were everything in this industry -- at least at first. Oil companies sold through vertically integrated, self-owned, distribution systems to local dealers. Then the evolutionary commodification of oil eventually led to the advent of market trading of "spot market contracts" priced by the barrel. Exchanges now even trade oil futures.

You would think this development would have changed everything about how oil is sold by suppliers and bought by users. It did. But it didn't eliminate oil salespeople. Oil buyers, it turns out, value someone to act as a service provider to smooth the buying process. Not every company wants to buy oil based on the volatile daily price, or even the volatile futures market prices. Salespeople help craft supply agreements that may refer to "spot market" prices, but add other factors to the purchase and delivery agreement to make the supply better-suited to the buyer.

Ev en more convincing should be the example of the financial services business. Financial products are the ultimate commodity. Mutual funds are merely bunches of stocks or other financial products that are priced daily, hourly or even by the second on exchanges around the world. Stocks and mutual funds and other financial services, from the "boring" life insurance, to the notorious Collateralized Debt Obligations and the many other so-called-sophisticated financial instruments (still all made up of financial products that can be counted and measured), are sold by the highest-paid salespeople in the country.

What do media advertising and financial services have in common? In both cases they have a clear and quantifiable history that can be viewed and analyzed for what worked. For both, past performance i s no guarantee of future performance. Yes, that is the problem. The market keeps changing, customer behavior keeps changing, and advertisers are always trying to understand and anticipate that change. So salespeople who bring a sophisticated understanding of their customer's business and their customer's needs, are valuable. And they will be valuable as long as change keeps happening - likely to be true for a very long time.

Still not convinced? Try this: Google has more than 500 salespeople just serving the large national account sector of its business in the United States alone. Even though Ford can count every click buy, Google finds it is worthwhile to pay a sophisticated sales person to facilitate that relationship, show Ford new ways to use Google's offerings and solve problems.

So my message to you publishers and salespeople wondering about your future is, get really smart about your customers' businesses. Harvard Business Review published an article in 2004 that spells out this approach: "With buyers increasingly savvy, how can companies resist relentless commodification and distinguish themselves from rivals? An increasingly popular approach is to emphasize one's expertise in the business, as distinct from the quality of one's product. Such competence-based marketing is especially persuasive in business-to-business relationships that involve hard-to-assess goods or follow-on services."

The sale of advertising is a business-to-business transaction. It is a long-time-proven "best practice" to help advertisers understand their market in order to illustrate how an advertising purchase will work. Today this best practice is honored mostly in its absence. Salespeople who do help their customers rather than tout their product will thrive. When you can bring new and interesting ideas, valuable information, points of views and analysis to your customers, there will always be a place for you.

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Daniel Ambrose has been providing strategic and tactical consulting to print

and online publishers since 1994. He is on the Board of Directors of the

Guard Publishing Company, a privately held local newspaper, and the Board of

Advisors of Pando.com, a peer-to-peer Internet file sharing service and

GoDengo, a SaaS Internet publishing service for magazines publishers

(http://ambro.com/about_us.htm)

Ambrose helps Publishers, Sales Managers and Sales People learn how to sell

Internet and host sell print advertising by bringing value to the sales

transaction, making more sales, with Strategic Sales Tactics Training.

Learn more here: http://ambro.com/sst_training.htm

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