Borrell report assesses local digital sales


HandshakeBorrell Associates’ latest report, “2013 Update: Assessing Local Digital Sales Forces,” covers their latest survey of sales managers and has uncovered some interesting revelations about digital-only AEs. For instance, companies that have them on staff average 2.2Xmore revenue than those that don’t.

This is the third time surveying managers and the hiring of digital reps is definitely on the upswing, but the competition is stiff. Pureplay companies surveyed were offering 50% more base pay than traditional media companies were offering for digital reps.

Participants were solicited through Borrell Associates’ client base, as well as through promotions by the Radio Advertising Bureau, Local Media Association, and Local Search Association. The survey was conducted online. 220 media executives responded to the interview solicitation. One-third were from newspaper companies, 56% from broadcasting, 12% from yellow pages, and 4% from Internet pureplays.

From the report:

Hiring and training sales reps has become a top priority in the local media industry. Everyone seems to be competing for that coveted digital-savvy rep or manager who can help drive online revenue. Our latest survey of sales executives shows just how important they can be. Local media companies with digital-only reps:

•• Average twice the online revenue of those without digital reps.

•• Have a sales staff that exhibits greater ability to consult with and educate advertisers

•• Have a sales staff with stronger capabilities to understand and sell digital products

The love isn’t ubiquitous. Our survey found several managers who haven’t boarded the digital bandwagon. “We should be focusing on our strength, audio advertising,” one radio manager commented, “not selling our clients the pipe dream of ‘interactivity’ that digital has promised but seldom delivers.” It’s a minority opinion, but certainly represents a sibling rivalry occurring in local media families where the cute digital brother gets all the attention.

Hiring digital sales reps is on the upswing again. Our first survey in 2009 revealed that 60% of respondents had at least one rep whose sole focus was digital products. By 2011 the recession had cut that figure to 46%. Our latest survey shows 62% of sales managers in newspapers, radio, TV and yellow pages companies reporting that they employ digital-only reps. But it’s not a lot. Two-thirds of those respondents said they have no more than two.

There appears to be formidable competition from online pureplay companies like Yodle, Pandora, Yelp, ReachLocal and others. The pureplay managers in our 2013 survey reported an average starting salary of $54,100 for reps, which is about 50% higher than what TV, newspaper and radio managers were offering.

This report examines the responses from 220 media managers in the pureplay, newspaper, radio, TV and directory industries with regard to digital sales efforts. It includes more than 200 open-ended responses from those managers offering insights and suggestions on digital vs. traditional sales compensation plans.

The majority of traditional media companies now have at least one digital sales specialist on staff – if only to act as an interpreter for traditional reps in a four-legged sales call. The use of dedicated digital AEs varies by media, with newspapers well ahead in employing them. Our initial survey in 2009 had 60% of the respondents claiming to have at least one account rep dedicated to selling nothing but online products. Sixteen months later the percentage dropped to 46% – the result, we believe, of traditional media suffering the recession and laying off workers. The latest survey puts the percentage back at 62%. Newspapers and TV both gained from our previous survey. Only 11% of the radio respondents said they employed such reps, the same as in our 2011 survey.

On average, respondents reported having fewer than three dedicated digital AEs and 15 AEs with combined sales responsibilities. That’s a ratio of 1 digital-only rep per 4 regular salespeople. The preponderance of companies has only one or two digital AEs, however. One-third of the respondents reported having just one digital rep, and another one-third reported having two.