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Integrated Billing



By Bill Mickey
08/31/2007

Multi-platform, integrated sponsorship sales—from pages to Web sites to events—have become big-ticket sales for magazine publishers. Indeed, most are now in a position to offer a wide range of programs. The challenge, however, is managing the sale post-close—especially when billing it.

Four integrated program franchises attached to Bonnier’s Field & Stream and Outdoor Life account for a combined $6 million in revenues. Tracking how each component performs through a dedicated P&L for each franchise has been critical for the sales team in managing a project’s execution—from strategic direction to resources.

Breaking It Down
Field & Stream’s Total Outdoorsman Challenge, for example, packages sponsorships that include in-book advertising, a dedicated Web site, a television series, and a seven-city event tour. Nine manufacturers sponsored this year’s Challenge, with Jack Daniels taking the title sponsor position. However, the program had modest beginnings. “In 2005, it was value added,” says group publisher Eric Zinczenko. “When I started in 2006, we made a cultural shift from an added-value play to a revenue-generating franchise.”

Zinczenko took it a step further by breaking out each component of the package, giving it its own P&L. “We actually bill the partner on each of these different components on the program,” he says.

The packages are flexible, and Zinczenko takes the lead from the partner on which marketing pieces are emphasized and how they prefer to be invoiced. “We allow them to decide what’s best for them in their marketing needs. So if online is not a big component, we’ll take that out and we’ll put more into the event,” he says, adding, “and if the advertiser prefers that we bill them all one cost, we will do that.”

The sales team does, however, provide the client as much detail as possible on each component’s expected performance, and at what cost. “We have to be careful to not just throw a number out there,” says Zinczenko. “Everything has to be justified. We have to show the cost of a particular component in a program and why and what kind of impressions they will get.”

Once the payment arrives, Zinczenko then sits down with the general manager to allocate each line item into its proper expense and revenue bucket. “I decided to separate a P&L for events, a P&L for television, a P&L for radio, a P&L for Web sites and a P&L for print,” he says.

This, Zinczenko says, provides a detailed view of how each component performs, which allows him to adjust a program accordingly. “There are some publishers that say, ‘Let’s just lob this under the print advertising section, because this program ultimately helped print advertising.’ But I don’t think that’s giving you a true indication of how strategic your business is looking and why you’re executing on a particular event.”

As an example, Zinczenko is able to show that the events portion of the Challenge has increased almost 165 percent this year over last year—and can project that it will increase another 60 percent next year. The print component is up 35 percent this year, to 49 pages.

Breaking out the performance of each component also gives the team a sense of whether it’s worth the effort. “If you’re just trying to get a new advertiser and 10 pages, you might end up spending $500,000 on the program. It begs the question whether it was worth it or not to execute,” says Zinczenko.

A direct bead on component performance has also allowed Zinczenko to enhance the franchise. “As you build the program, you can take the revenues it has generated and reinvest them to make it stronger,” he says. “Because we were able to generate some cash revenue with the Challenge, we were able to take that money and invest in television for this year.”

Cash Up Front
Early on, Zinczenko conditioned his sales team to ask for cash up front, particularly for the event component of the package. This provided seed money, and had the immediate benefit of covering expenses. “We’re trying to drive cash sponsorships to offset the execution cost and fees,” says Zinczenko.

Having costs covered up front also allows Zinczenko a strategic view of the rest of the program, giving him potential wiggle room on other elements. “If it comes to a point where we have to negotiate deeper on the print portion, we’re willing to do that because we know the event has been covered,” he says.

A Cultural Shift to Cash
When Eric Zinczenko started at Field & Stream and Outdoor Life in 2006, he conditioned his sales team right away to begin asking for cash up front for certain components of their integrated package deals. The benefits were clear:

• Cash up front covered the expense of executing on the rest of the program
• Cash allowed Zinczenko the room to negotiate deeper on the other elements of the program, if needed.
• By financing the rest of the integrated package, the sales team understood quickly that they were in a position to present the client with a truly integrated package, not a superficial value-add program.
• The economics of the integrated programs offered another opportunity to incentivize the sales team with a new commission structure.

By Bill Mickey
08/31/2007







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