Effective Selling in a Down Market
Seven tips to keep the ad dollars coming.
Debating whether the U.S. economy is technically in recession or not is largely academic for magazine publishers trying to hit their budgets each month. âIâve been through a few of these and this one is troubling in many ways because there doesnât seem to be one sector that isnât feeling the strain in one shape or form,â says Giulio Capua, vice president and publisher of Architectural Digest. âWhen youâre a magazine like ours and youâre tied to the housing market, believe me, itâs a frightening time.â
Especially when you consider that in some markets, like real estate, major advertisers arenât just cutting back, theyâre disappearing. âBear Stearns goes out, Countrywide goes out, thatâs a lot of money thatâs just not coming back,â says Michael Desiato, group publisher of Incisiveâs Real Estate Media. âIâm trying to do forecasts now for this year and next year and itâs anybodyâs guess. Youâre almost afraid to call up people for fear they might cancel an ad.â
Still, both Capua and Desiato and their teams continue to sell (Architectural Digest is up 3.9 percent in pages and 10.1 percent to $88.1 million in ad revenue in the first half of 2008, according to PIB).
Below, the two publishers outline what has worked for them to keep money coming in, including trying to tie advertisers more directly to editorial without crossing the church-state line.
1. Create Scale
In a down market, advertisers need to know programs have reach and that can mean packaging print with other products. âOne of the challenges for larger advertisersâautomobile, cigarettes, etc.âis when theyâre executing programs, especially with magazines, does it have enough scale to warrant creating a display?â says Capua.
Events are a common added-value component for AD. âEvents are a hot button in is this âexperience economyâ and weâll offer to make an advertiserâs event more special,â says Capua.
AD leveraged the Architectural Digest Design Showâa consumer trade show that draws about 20,000 attendeesâto create new sponsorship opportunities for brands such as Lincoln Mercury, which wanted to emphasize the design of a new vehicle series. The campaign featured in-book advertising, exposure at the show and ultimately (unsolicited) editorial coverage in the magazine when Lincoln Mercury brought three young female designers who worked on the cars to the event. âThis helped shatter myths about what Lincoln Mercury was about and influenced a community with some predispositions about the design,â says Capua. âOur editor-in-chief thought it was interesting to profile three young women working for a Detroit car company. It was completely unrelated to the sponsorship but ended up taking it full circle.â
2. Develop New Products
Real Estate Media has made up for some of the advertising drop with a series of sponsored roundtables in which a client gets to sponsor and even participate in a discussion of trends in the marketplace, which is then featured in the magazine. âTheyâre basically buying a seat on the panel and the stories are labeled âsponsored panel,ââ says Desiato. âSometimes weâll package it for high volume advertisers. Itâs basically custom publishing. Itâs a legitimate topic done as a legitimate story. The advertiser doesnât get to review the story but they do get a few more bells and whistles such as a logo, a bio for their representative, something to help promote their company.â
Real Estate Media typically does one sponsored roundtable per quarter for each of its four magazines. The publisher tries to recruit four or five sponsors per roundtable, at $10,000 each. In addition to the print component, podcast versions appear on the magazinesâ respective Web sites. âAudio works well for this audience,â says Desiato. âWeâve looked into video but weâre not sure itâs right for them. We will do focus groups on video, which is a substantial investment, especially when youâre not sure how to monetize it.â
Desiato also advises publishers to reach out to markets and clients they may not have considered before the downturn. âWeâre working with Dubai right now and if it works out, that could be very big,â he says. â Those are the kinds of things you reach out forâwhat you typically would not look for. This time last year, I wouldnât have sent my sales manager to Dubai.â
3. Make Sure Online Ads Drive Response
If ads arenât working, try something new. Online ads are especially quick to fix. âTypically, ads on our Web sites are static and not based on a CPM model,â says Desiato. âWeâve gone to more text-style link ads that tend to drive more traffic than a cube. People donât tend to click on Web ads but will click on text.â
4. Hold Rates But Offer Alternative Buys
Architectural Digest is a fairly unique Conde Nast title in that its endemic advertiser baseâfabric, lighting, furniture, basically anything going into the homeâhas little cross-over with its sister magazines. Many advertisers are small businesses with an average schedule size of two to three pages. âWeâre usually the biggest line item on their marketing budget and weâre often twice as expensive as other magazines out there,â says Capua.
Holding to set rates is getting increasingly difficult for publishers but AD just abides by an established corporate policy, according to Capua. âItâs the easiest thing in the world at Conde Nastâcorporate contracts are negotiated on revenue and itâs out of our hands,â he adds. âWe negotiate added-value but we donât negotiate rates.â
Still, AD has to offer some flexibility for the smaller advertisers that make up much of its customer base. âWeâve had to be creative in creating regional opportunities for advertisers that want to be in the magazine but canât make the leap nationally first,â says Capua. âWe have Top 10 metro buys, New York City-buys, California-only buys. Those are usually the way you find companies entering our brands and as their business grows, they grow into a national buy.â
5. Find the Sweet Spot
Sometimes publishers can tap into other budgets beyond print or online dollars. âItâs interesting to see where advertisers will have money in the budget,â says Desiato. âThey may not have money for an ad but they will have it for a cocktail reception. More and more, weâre saying weâll produce a cocktail reception and you can fly in under our banner.â
Relationships are key but it may be time to cut out the middleman. âThere are ways of finding money and the key is finding where the sweet spot is,â Desiato says. âIf youâre just talking to marketing directors or agencies, youâre never going to get it. You have to go direct now. Go right into executive level decision-making. If you donât do that, youâll just be in more pain. Thereâs no magic bullet in this. Iâve been through four of these, I know how the story ends.â
6. Take A Long Term Approach
As advertisers pull back (and many push publishers on price and value-adds), publishers need to consider the long term relationship with the client. That means going above and beyond for an advertiser with a proven relationship but also drawing the line for a client thatâs proving to be more trouble than theyâre worth. âWhen you hear an advertiser say they have to trim an insertion, do we still execute on the added-value or do we trim it back 20 percent?â says Capua. âWe try to take a long term approach with our long term partners. If youâre both on same page and honest and direct, you can work it out even if there are a lot of hard costs tied into the value-added component. Understand the clientâs objectives early so you can be out ahead.â
7. Put Some Distance Between You and The Competition
One opportunity in a downturn is that category leaders can actually increase their lead on the competition trailing behind them more easily. âIn booming markets, itâs harder to grow market share,â says Capua. âAdvertisers are compelled to spread their money around. When the market shrinks, theyâre faced with difficult decisions and say, âIâm going to stick with what works.ââ
Negotiate from a position of strength (even if thatâs not the case). âYou need to position your products more as something advertisers need than something they want,â says Desiato. âThereâs a thin line between advertisers who want to be there and those that need to be there.â