On advertising market shifts

Recently, Robert Paterson pointed out a Diane Mermigas piece talking about shifts in the advertising market, especially in relationship to network TV sales. According to the Mermigas analysis, network TV stands to lose up to $1.5 billion during this season of “up fronts” alone. That’s a lot of dough for any industry to lose nearly overnight, even if it is spread across several mega-media corporations.

I commented on Paterson’s site, but realized I liked my response so much I wanted to elevate it to my own blog in the process. Here’s Paterson’s question and my own response:

Is this the problem stated in Money terms?
Here is Diane Mermigas talking about the commercial networks — is this the same for NPR and PBS?

I would say Public Media are not impacted as directly by advertising losses like this, nor do the losses/impacts happen in phase with commercial media.

But the losses are there or soon will be (depending on the size and sophistication of your advertising clients).

But what’s worse — much worse — is that revenue from advertising (sponsorship!) is not managed as professionally in public media as it is in commercial media. This means that trends in ad spending are not understood as well in public media as they are elsewhere. So as changes ripple through the ad space, public media won’t figure it out for several cycles. Blunted reaction times will lead to lost opportunity and lost money.

Commercial outlets have a firm, financial bottom line and they calculate where that line lies every day, every week, every month, every quarter. Public media is not so fastidious. Our bottom line is the soft concept of “public service” (imagined in many different ways) and revenue is only a means to that end. We don’t have hard measures of public service, we don’t analyze so deeply or accurately, as a group (I’m sure there are some exceptions, of course).

Indeed, as nonprofits, we tend to downplay “overhead” costs like sales analysts or “management” functions that could lead us to higher revenues and better customer relationships in the underwriting space. We don’t really operate like a business where it matters most — where money intersects with mission.

On top of all that, then there’s the problem of TV. All TV outlets have fewer and fewer viewers as the mass media model breaks down in a flurry of new outlets and platforms. And then there’s the demographics of PBS generally, which are less-than-desirable for many marketers.

In short, the money is moving where it can get greater impact, and public media outlets are pooly prepared to sense the change or alter course to meet the advertisers at their new destinations.

The solution? Get engaged locally in a way that’s unassailable by national trends. Build deep relationships that, yes, can be “monetized” in both corporate and individual realms. Develop relationships with sponsors that have historically not played in local media. Plus, get your butt online in a real way, not with business card web sites. Oh, and be sure to have some hard-nosed analysts on board that keep the business honest on the numbers — avoid the doe-eyed optimism that sometimes overtakes “soft” nonprofits like ours.

4 thoughts on “On advertising market shifts

  1. You are correct in suggesting that advertising/underwritng revenue is not managed professionally in public media (public broadcasting more specifically) but there are exceptions. There is a company, Public Radio Partners, that reps public broadcasting stations to clients as a contract service. They are made up of sales professionals and, in my experience, are highly professional in their approach and highly successful for those stations that employ them. Admittedly, the model only works in larger markets, but it can be done.

    PRP still must deal with some resistance to new ideas from the tradionalists at the station, (the business-like approach and the “commercialization” of some of it’s services – like on-line or ancillary delivery of programming) but, as the need grows and the comfort level with this sales approach works, most find that the “public radio sound” is not negatively affected and the bottom line does improve.

    The key here is that while we’re very good at programming, and very good at soliciting contributions from listeners, there are aspects of our business in which we don’t have experience and we should learn that to become expert we need to employ professionals. One area where this approach applies is in sales and another is in helping us convert our thinking from public radio or TV to the new paradigm of public media in all its forms.

  2. Thanks for the comment PS! I’m wondering… what might public media companies to do attract sales talent into the fold — talent that’s especially good at understanding these things? Would it just be money?

    I mean, if I wanted to hire a sales person or manager or team that was focused on selling on multiple platforms and understood new media sales models and all that, would I just setup a high-paying (high commission) environment and then search for the best, most experienced commercial sales folks I could find? This is a tough one, I think. We need hard-nosed sales teams to keep moving us forward (without compromising our values or the law as laid down by the FCC, of course).

    I do think your last points make a ton of sense. We need to bring in folks that are real-world (even commercial world) “pros” in their work. And we need to be prepared to be transformed by them. Indeed, we need to ask them to help transform us.

    There’s a growing place for public media in the world as commercial media devolves into a a crass miasma of marketing. It deserves support, financial support, and can help a thoughtful audience connect with thoughtful companies along the way.

  3. I think it’s too simplistic to simply say “money” although that is the primary driving force for sales. I think it also takes a committment to the mission and an understanding of the sensibilities of public media. With the FCC rules, and various station policies that are restrictive to length and language, selling public radio and TV can be challenging – but what a great target audience! The audience on the other venues (HD, streaming, podcasting, etc.) are not yet successful enough to be prime drivers for sales.

    The answer to your question about finding the good sales staff lies first with having a good sales manager (or consultant). One who understands the product and also is experienced and successful in sales. This person needs to bring the methodologies that work into the public space. And, they need to be tough, that is, we in public media are not very good at cutting ties with low level performers. A good sales manager cannot afford to “carry” someone on the sales team. If targets aren’t met, the incumbent is gone and another is found who makes it work. We tend to analyze the cost of replacing people – which is not insignificant – but we don’t analyze the cost of under performance.

  4. “We tend to analyze the cost of replacing people – which is not insignificant – but we don’t analyze the cost of under performance.”

    Talk about a great quote. Ain’t that the truth!

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