A-B-C Revenue Generation: Do the Little Things Well

In baseball, lots of singles and doubles are more prevalent than a grand slam. More games are won with what former Yankee's Manager Joe Torre called "A-B-C baseball," a reference to doing all the little things right in the game.

On a hunch, while at the min day Summit in New York, I bumped into Hanley Wood President Peter Goldstone, and asked him what percentage of ad sales came from grand slams (major accounts). "Great question," he said, "we're doing an analysis right now and more and more it is the smaller accounts -- no doubt we need to do much more for this audience." Philippe Guelton, COO of Hachette told me it was dependent on the title, with Car & Driver supported mainly by eight large accounts, while the ratio was flipped for shelter magazines.

As large ad expenditures ebb (hopefully for just the short term), it is A-B-C baseball that will increase web revenues. But setting up an ad department predicated on selling grand slams is not the way to get there. "We had to reduce the cost of sales," explained Jeff DeBalko, Chief Internet Officer for Reed Business. "We can't be flying people around the country for $30,000 accounts."

Look for inside sales departments and self-serve ads to be the new norm, with many of the execs telling me that they are looking to set up directory listings. The key, said Jim Spanfeller, CEO of Forbes.com, is to look for ways to monetize differently. "Move your brand to the web," he told the audience, "not necessarily your product."

Publisher Push-Back & Other Relationship Tips

Opened up a missive in InfoCommerce's newsletter this morning. Russell Perkins has been warning publishers for some time that they have acted like lemmings in embracing business models that shift the burden of risk from advertisers to publishers. First advertisers insisted they would only pay if people clicked through to the ad site (never mind how hideous or uncompelling the ad creative might be; and then they said, well we'll pay if a bonafide lead generates, to finally, here let me throw you a little spiff for doing all the heavy lifting while Harvey on the phone bank closes the sale.

The pay-per-click model (PPC) was started by a small firm Goto.com which was rolled up into Overture (Yahoo). But the model really came alive when, a year later, Google launched AdWords in 1999. Suddenly bidding for traffic was all the rage. And it is a wonderful model for search engines, but a very risky one for publishers, who are developing sites with meaningful content around which to place ads. The risk to advertisers for this model is nil: spend a few dollars to get traffic to their sites in exchange for potential sales? why the PPC model turned out to be both advertising and the limousine to get buyers to them!

In fact, advertisers were so empowered by this model that they started demanding that the publisher not receive anything unless a sale was made - and within a time period of 30-90 days before the site's cookie expired (or was vacuumed away). I mentioned the PPC conundrum to Jean-Philippe Gauthier when he was Vice President of Gesca Digital the online arm for Quebec's leading business site CyberPresse. He told me how a leading insurance wanted banner ads on a PPC model. Gauthier agreed -- on one condition: that the banner did not name the insurer.

Of course the insurer was upset, because it turns out branding is valuable afterall! This advertiser didn't want to pay for it, but when it was off the table, suddenly there was a change of heart.

Perkins urges Publishers to start pushing back like Gauthier did, and to remind ourselves that if we are hell-bent on doing lead generation, we do so at a substantial increase than mere dollars per lead. Put the burden of risk of doing business back on the advertisers, he chides. Further, he even suggests some sort of monthly subscription fee to be considered for the leads.

That's the approach that we took with Pure Contemporary: to create a lead generation program based on manufacturers getting a little skin in the game by allowing them to create a virtual catalog for a fee. Each page is search engine optimized, and leads are forwarded to the advertiser. We are not unique in doing this, many publishers in the database directory space like Thomasnet and GlobalSpec have branded themselves as marketing resources, not just mere publishers. Yes, it is a bit more of a consultative sell, but that is how we as online information providers add value to the advertiser-publisher relationship.

It really isn't about keeping score as to whom has more risk, it's about creating a win-win. Because frankly, without that, one of you is out of business, and that isn't good for any relationship.