Digital Ad Spend Is Tripling: Don't Let the Media Giants Take It All
Digital ad spend is up–way up.
In particular, mobile advertising spend increased by 25 percent in 2017; industry experts anticipate this figure to more than triple by 2021. Right now, over half of this growth is going to two digital media giants, Facebook and Google. How can media ad companies compete with these giants and garner their share of revenue growth?
Along with massive investment, advertisers now demand more sophisticated tracking and targeting benefits. Advanced, cross-platform metrics are must-haves for advertisers seeking to customize messaging and maintain relevancy with consumers.
In order to survive, media advertising companies have an imperative to develop a complex and wide array of solutions to satisfy these demands and fight back against the digital media giants. Alexander Group’s (AGI) client experience indicates that successful sales organizations will invest in the right mix of roles, including support positions and specialists, as well as provide adequate training for sellers in digital and mobile advertising sales.
AGI’s media company database suggests that there are clear differences in investment behavior between two types of peer groups:
- Digitally focused companies–those who generate more than 50 percent of their revenue from digital and mobile advertising sales
- Traditionally focused companies–those who generate less than 50 percent of their revenue from digital and mobile advertising sales
Digitally focused sales organizations’ investments often concentrate around optimizing support ratios and providing adequate digital and mobile training for sellers.
Perhaps due to the highly technical and complex nature of digital and mobile advertising sales, digitally focused companies invest twice as much as their traditional peers in sales enablement (e.g., support roles). In particular, they invest more than their traditionally focused peers in pre-sales roles, account managers and advertising operations.
Digitally focused companies also spend an average of 49 percent of their sales expenses on areas other than sales personnel pay, versus 40 percent at their more traditionally focused peers. Specifically, digitally focused companies invest much more heavily in training expenses for their sales organizations. For every $1.00 spent on training for a seller at a more traditionally focused media company, digitally focused media companies spend $4.70 per seller.
These concentrated investments show high returns, while also improving overall sales organization performance. Companies that focus on providing the appropriate digital enablement and training tend to experience less churn than their more traditionally focused peers. Digitally focused companies also generate more revenue from new customers and higher total revenue growth rates.
How Alexander Group Can Help
With advertising dollars continuing to center around digital and mobile, media advertising sales companies must satisfy advertisers’ audience-targeting and cross-platform demands. To do so, media sellers need adequate training and support to craft unique solutions and successfully grow digital and mobile advertising revenue.
Through recent engagements, AGI has helped media advertising sales clients transform their sales organizations from traditional models to solutions-oriented, digitally focused sales models. AGI has proven experience helping clients with a variety of backgrounds (i.e., Pure-Play Digital, Integrated Print, Local and National Broadcast) increase digital market share and revenue through sales compensation design, role clarification and incentive alignment. Alexander Group also has experience with digital and technology firms that operate with different approaches to hunting and farming. This combined expertise puts AGI in a unique position to serve media clients.
To assess and transform your sales organization, please contact Alexander Group’s media team.
Want more insights? Explore Alexander Group Resources.
Originally published by Melissa Love.
