Monday at the Mega-Conference

The State of Media Sales: Initial findings released

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Sixty-six percent of media sales managers and executive managers surveyed for the 6th annual State of Media Sales survey did not make their goals in 2014, C. Lee Smith said Monday at the Key Executives Mega-Conference in Atlanta.  Smith, president and CEO of Sales Development Services and publisher of Media Sales Today, which conducts the annual survey, announced the first 10 survey findings at the Mega-Conference.

Additional information soon will be released in a whitepaper.  To request a free copy of the whitepaper next week, go to MediaSalesToday.com.

While 66 percent of the newspaper managers did not make goal last year, 26 percent did, and 8 percent said they exceeded goal.

Additionally, 41 percent of U.S. newspaper sales managers surveyed said their revenues either were flat or were up in 2014 vs. 2013. 

And, the average percentage of U.S. newspaper revenue from digital was 13 percent in 2013, 15 percent in 2014, and is predicted to exceed 20 percent this year.

One in three managers surveyed say it's getting easier to sell online/digital advertising, while 43 percent said it's getting harder to compete with Google, Facebook and online pureplays.

Smith asked a standing-room crowd in this session to guess how many hours (on average) newspaper sales managers are spending on reports or in internal meetings each week.  The State of Media Sales put that number at 17 hours and six minutes.  That compares with the nine hours and 39 minutes they spend helping reps plan and prioritize their sales efforts each week.

With regard to the average sales staff turnover at U.S. newspapers, the study carried some not-so-good news.  The average turnover among U.S. newspapers was 30 percent, compared to 23 percent for other U.S. local media.  Smith told conference attendees that turnover isn't only a newspaper problem – it's just a bigger problem for newspapers than it is for others.

He went on to say that the number one frustration of media sales managers with regard to media staffing is a lack of sales talent/competency.  He reported that 77 percent of the 305 media sales managers and executive managers surveyed between Dec. 18, 2014, and Jan. 15, 2015, say it has gotten harder to hire high quality salespeople in the past year.  And the number one method of new rep onboarding (by far) is "learn on the job," he said.

A separate 2014 survey of media salespeople found that nearly one in three sales reps say it has "gotten harder to make money in my current position."

Two-thirds of the sales managers surveyed expect a revenue increase in 2015.  "Historically, I should warn you," Smith said, "that the sales managers have been a little rosy in the past. ... Nonetheless, that is good news."

Smith cited five main categories where these revenue gains are most likely to come from: small businesses (not major accounts, which are expected to decline a little in 2015), healthcare (specifically, dentists and cosmetic surgery), recruiting and employment, the return of real estate and native advertising/advertorial.  Smith also said that automotive is expected to do well this year, although it won't be a huge rebound.

C. Lee Smith demonstrates what's happening to many newspapers revenue-wise.
He added a bit of sobering news, saying that one in three sales managers also say that it's harder to overcome advertiser churn now than it was a year ago.  For purposes of this survey, churn was defined as "lost accounts."

Smith demononstrated the problem that newspaper churn is having on newspaper revenues (see photo to the left). "A lot of newspapers out there aren't really having a problem with new business development," he said.  "We can sell advertising.  We can sell digital," he said.

"The problem is: Radio Shack goes bankrupt, banks merge, a rep leaves and takes a couple of big accounts with him, advertisers are upset because a rep left, an agency takes over and decides to spend all of the money on TV, and pretty soon, what you're left with is less than this empty jar.  That's your advertiser churn."

"That's what is happening to a lof of us in the revenue area.  So, we've got to plug those holes.  We can't just put more revenue in there because it's going out the bottom end faster than we can put it in the top end."

He offered conference attendees 10 takeaways:

  1. If you didn't make goal in 2014, you're not alone.
  2. Newspapers can still make money in this marketplace.
  3. Digital revenue is increasing, but not as fast as some managers and forecasters expect.
  4. It IS getting easier to sell digital.
  5. Google and Facebook are a bigger concern to many sales managers than other local media – and for good reason.
  6. Spend less time in meetings, more time coaching and on-boarding new sales reps.
  7. You win (and lose) with people.  If you can't hire good reps, you have to develop them.  (When he asked the audience where they find their best salespeople, conference attendees cited restaurants, bartenders, baristas and salespeople who work for Enterprise car rentals.)
  8. Focus on how you can make it possible for your good reps to make more money.
  9. Most newspaper sales managers are expecting a good 2015!
  10. Growth will come from local-direct, not majors.

Saying he always likes to leave his audiences with one extra thought – a 10+ – he encouraged newspaper executives to find ways to slow or reverse churn, saying it is critical to revenue and profitability.

Smith, The State of Media Sales
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