You may already have a solid team of journalists and specialists in technology and social media marketing. But that isn’t enough. You need to hire at least one person who specializes in sales of advertising, subscriptions and other products.
We’re going to discuss why you should do it, who you should hire, and how much to pay the person.
But we can’t afford it
You have a limited budget, so you might think you can’t afford to hire a salesperson. You might not realize that you probably are paying sales commissions of anywhere from 30% to 50% of the revenue from every ad you run on your website.
Who gets that money? Google, Facebook, and other automated advertising intermediaries. They take a cut of every ad. This is revenue you are giving up.
So why not bring all the money in house, with your own salesperson? In the short term it will be a cost. In the longer term, it’s an investment. If you don’t have the cash, run a crowdfunding campaign to bring a person on board.
Look at the numbers
The numbers will tell you why you need a dedicated salesperson. I’m part of SembraMedia, whose mission is to help digital media entrepreneurs in Latin America. We did a study of 100 media startups in the region. In particular we looked at their business models. (The study is also available in Spanish and Portuguese.)
One of the findings had to do with advertising revenues. We found that media organizations that had at least one salesperson generated 30 times more revenue than those that didn’t have a salesperson.
The median annual ad revenue for startups with at least one salesperson was $117,000 a year. The median was $3,900 for those that didn’t. (And by the way, the median revenue is the midpoint where half have more and half less. The median is a better indicator than the average because it eliminates the bias toward extreme cases.)
It could be argued that these numbers have a bias toward larger organizations because they would have more resources to hire a salesperson. But a small news organization could benefit, perhaps starting with a salesperson who comes on part-time.
If you bring in a salesperson to generate revenue, that revenue will allow you to hire more journalists, expand your coverage, and create more value for users. And when you create more value for users, they are more willing to buy other products and services from you, such as subscriptions, memberships, sponsorships, e-commerce products, consulting, and so on. Generating ad sales internally will set off a virtuous cycle.
Who to hire
So, how do you find the right person? You could recruit someone from within your own staff. This could be ideal. That person already understands your product and its value and can communicate that to potential advertisers. However, this arrangement won’t work unless the person gives up their other duties. You need a person totally focused on generating revenue.
A second option is to recruit from among your loyal users. You want to find someone who already values your product. You want a person who believes in your mission and the value you deliver. So, advertise the position first on your own newsletter or website.
There are outside contractors that will respond to such an ad and offer to sell advertising for you, but be careful. In my own experience as a publisher, I found these kinds of contractors unsatisfactory. Here’s why: they didn’t understand our value proposition.
They would sell space rather than value. They would use the rationale that more eyeballs were better, rather than focusing on reaching the right eyeballs. They perceived our publication, with a niche audience, as less valuable because it was smaller. And they framed their sales pitches that way.
No matter who you select, you want a salesperson who can communicate that the credibility and trustworthiness of your brand–and the good will of your community-service image–will rub off on any sponsor or advertiser. They need to know they are not just selling space on a website or printed page.
How much to pay
You could pay a straight salary, which gives a person stability, but that doesn’t give them any incentive to sell more. On the other hand, putting a person on commission alone means their income will be volatile—high in holiday seasons, for example, and low in others.
My recommendation is that you pay a salary supplemented by a commission of perhaps 15%. That figure of 15% is typically what a publisher used to pay to an ad agency to sell ads for them. The percentages and the levels of salary and commission will vary, depending on your market. You need to do some research.
Brand safety, advertiser benefit
Having a dedicated salesperson also benefits the advertiser by guaranteeing that their message will appear in an environment of high-quality, trustworthy content: they will gain brand safety, in other words.
The businesses that choose to advertise through Google’s Adsense, Facebook, or other social networks often have no idea on whose website their ad will appear. That decision is made by an opaque, automated system of algorithms.
For example, an ad for men’s shoes could be delivered to quality news sites or those advocating white supremacy, as long as the users of each site have shown an interest in buying men’s shoes. And the advertiser can’t always control where their ad appears. Algorithms decide.
Don’t build a wall
An old rule in journalism was to keep the newsroom separate from marketing and sales in order to guarantee that advertisers wouldn’t influence news coverage.
That really doesn’t work in the digital world. Sales and marketing people have deep understanding of the audience and need to share it with their editorial counterparts. And a salesperson should be part of some editorial meetings to understand the product better and to share data about the audience with the journalists.
Obviously, a salesperson should understand that advertisers cannot be given any influence over editorial coverage in any way. But the two departments need to guarantee a steady flow of information between them. And everyone needs to know the boundaries and respect them.
So, to sum up. There are good financial reasons for hiring a salesperson. The salesperson you hire should identify with the mission and values of your news organization. A payment method should give incentives to the salesperson to sell more. When you do this, the advertiser benefits as well. And finally, make that person part of your team. They need to understand the product well to sell it well.
In addition to this newsletter, I produced a 7-minute video on the topic of hiring a salesperson, if you prefer to get your information that way.
James Breiner is a former ICFJ Knight Fellow who launched and directed the Center for Digital Journalism at the University of Guadalajara. Visit his websites News Entrepreneurs and Periodismo Emprendedor en Iberoamérica.