Programmatic Ad Sales Compensation

Do We Need to Pay Sellers in a Programmatic World?

Advertising companies are now using AdTech and Programmatic platforms that enable agencies and advertisers to directly place ad buys on a platform without leveraging a seller. How is this industry trend impacting ad sales jobs, talent profiles and compensation plans?

Sales process and sales motions drive job design. When selling brand campaigns or insertion orders (IOs), sellers must constantly sell each campaign, which typically lasts three to four months. The common coverage model is a generalist account executive (AE) who is responsible for new and existing agency/advertiser relationships (or just existing customers in the upper segment). Whereas, when selling direct response (DR) ads on an AdTech platform, sellers must get the customer on their platform and then drive revenue on that platform by making sure their customers achieve their ROI goals. Thus, many (not all) AdTech companies will bi-furcate their sales team into “hunter” AEs who are responsible for getting customers on the platform and “farmer” AEs who drive the ongoing revenue.

Selling AdTech solutions requires more technical knowledge about how the platform’s algorithms work. Sellers must convince their customers that the algorithm will place ads in the right spot to meet their marketing needs. This requires a much different skillset than selling an IO for a homepage banner ad. Furthermore, when customers can place their own ads on a platform, they no longer need a sales team to physically do that activity for them. So, the seller’s job is no longer focused on obtaining IOs. The seller’s job is now a consultative partner with the client to help them achieve their marketing goals via the AdTech platform. One Alexander Group client shared that >50% of their sales team are x-CMOs and other marketing roles as opposed to ad sellers from other companies.

If the customer does their own purchasing and the sellers are now marketing consultants, then should the sales team even be on a sales compensation plan? This is one question posed to us by a recent client. The answer is a resounding “Yes.” Someone needs to work with the agency and advertiser’s executives to increase ad budgets for their solution, optimize spending against those budgets, and ensure that they, and thus the company, achieve revenue goals.

There is one sales department where a sales compensation plan may not be used. That is in the self-service segment focused on the long tail of agencies and advertisers. However, even in this department, some companies do put their self-service segment managers on a sales compensation plan. They claim that these segment managers have a one-to-many persuasion responsibility via platform design updates and messaging to ultimately drive their self-service segment revenue growth.

Companies that add an AdTech programmatic platform to their existing IO-based business must accommodate both sales motions. Many will leverage a programmatic specialist job that acts as an overlay specialist for the core AEs and as an independent seller to AdTech-only customers. These jobs are on a sales compensation plan tied to the overall programmatic revenue of their assigned accounts. Many ad companies aspire to have AEs sell both brand-based IO business and DR-based programmatic business. However, given the different skills/knowledge and motions, leaders will have to invest in training, coaching and enablement to fully achieve this goal. This “hybrid” AE will be on a sales compensation plan tied to overall IO and programmatic revenue.

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