Maximizing the revenues of media products often requires looking at ad sales from a fresh perspective.
In 2007, I conducted a comprehensive review of ABA Journal advertising with the goal of reversing the five years of declining sales that I had inherited when joining the ABA in late 2006. We had tried to improve revenues with the status quo, but it simply wasn’t working. We needed a new strategy and new people to execute that strategy.
Almost all of the magazine’s ad sales came from endemic advertisers who marketed only to lawyers. But the legal vendor industry had been undergoing a sustained period of contraction, with our biggest advertisers buying up smaller companies and cutting total ad spending.
If we were going to grow revenues, we needed to reach out to a broader set of business-to-business (b-to-b) advertisers in the business services, financial services, and travel/luxury goods sectors, for whom lawyers were just a subset of their market. Fortunately, we had a good story to tell these advertisers, offering them a large audience of high-net-worth individuals who made the spending decisions for their law firms.
We also had a challenge on the expense side of our ledger. We were spending an unsustainable 40 percent of our revenues on the costs of commissions and ad sales support. Our five-person ad sales support department included an associate publisher, marketer, researcher, classified ad sales manager and ad trafficker. Some of these staff members had been with the magazine for decades.
To address these challenges, I terminated our relationships with two ad rep firms, consolidating all our business with one ad rep firm that had offices nationwide and a track record of expanding b-to-b ad sales for other publishers. I negotiated lower commission rates and convinced the ad rep firm to hire a new rep from the Wall Street Journal who would work only on our business in the important New York market.
The firm also took on responsibility for our marketing, research, ad trafficking and classified ad sales functions. That enabled me to make the tough decision to eliminate our ad sales support department. Our ad sales expenses were cut in half.
I worked closely with our new sales force, including joining them on sales visits, to target non-endemic advertisers. Over the course of the following three years, we attracted a series of new b-to-b advertisers to the magazine and our growing digital business, including Bank of America, Citibank, Comcast, Experian, HP, HSBC, IBM, Intel, Microsoft, New York Life, Office Depot, Porsche, Regions Bank, Ritz-Carlton Hotels, Sprint, Taj Hotels, UPS Stores, Verizon, and Xerox.
Thanks to this strategic review, we were able to thrive throughout a recession that forced many b-to-b magazines to close.