From his perch in rural Vermont overlooking the Green Mountains, Doug Weaver joined us by phone to talk about the state of the advertising industry and where it’s headed. Weaver, founder and CEO of Upstream Group, is a consultant and strategist who advises publishers and ad networks such as The New York Times, Yahoo, About.com, Dow Jones, and WebMD. A 15-year veteran of print advertising sales for publishers such as Hearst and Conde Nast, he was an advertising executive at Wired and Firefly Network in early days.
Doug is well known for his advertising sales workshops, authoring The Drift advertising blog, moderating the iMedia Summit series, and has served on the board of directors for the Internet Advertising Bureau. In Part 1 of our interview, Weaver reveals how publishers can make money online.
The Makegood: Tell us a little bit about your consulting and strategy work.
DW: Where I come in and who I deal with is chief revenue officers, all oriented around the sales side of publisher or ad networks businesses. I help them focus on differentiation, elevation, and execution. The most common issue people face in the business is that this has been a transaction-based business for some time — the buying and selling of advertising – part of it will continue to be about that, and that part of the business may accelerate. Most publishers who call me, what they’re looking to do is, they call me because they’ve got salespeople who are very often reactive. They’re dealing almost exclusively by email, working almost exclusively with media teams, media planners, maybe media supervisors, and they’re reliant on the outbound RFP [process]. Everything is done at the last minute on a tactical execution basis.
What they hire me to do is work with sellers and elevate them, get them ready to go and approach clients, senior agency people, to upgrade the things they are planning to talk about, and to be more strategic and better prepared. That ties in with the name of the company, Upstream Group: How do you get to that place where you have greater clarity and can make a difference, where you are more aligned with business and customer needs, and not just another choice on a spreadsheet?
The Makegood: How does automated selling fit into all this?
DW: I would say there’s a part of it that’s inevitable, and accepting the things that automated selling brings to the market is great, but it also creates a need at the publisher level to say if I’m going to take a percentage of my total inventory and make it available on the ad exchanges, what are the things that I and my sales team can do that can’t be fully automated? If it’s a question of taking 30 percent of unsold inventory and putting [it] on an ad exchange, that’s fine, but most publishers will not rely on automation to fill the whole tank. What they’ve seen is prices start to fall pretty precipitously in those markets. So what I focus on is if a portion of your revenue is coming from the automated channel, then your experiential channel blending sponsorships and integration that you sell has to be very different from that.
The Makegood: What is going on now with sponsorships and integration – how is that changing?
DW: We’re seeing sales and advertising practices on the publisher side split into two distinctive sellers. You have people who are audience sellers, and the audience sale becomes even more automated as time goes by. Marketers said they want to do reach- and compensation-based campaigns and they want to be able to buy and sell futures on ad impressions. That side of the market is what it is. I think it will be run by a fairly small handful of companies ultimately. You’ll have two to three exchanges, the holding company people will have their trading desks, and there will be some services in between such as Rubicon, PubMatic, and Admeld, and then some of the data players, not hundreds like now, probably a relative handful. That part of the business will run like the phone system runs. Basically everybody will be completing the call — a lot of switching going on. That’s the audience side. Audience sellers are good at quant and service.
On the other side, you’re going to have the experience sellers. A lot of publishers are going to have some audience and some experience offerings. The experience offerings will be where you get paid a premium for what you do. They’ll go to work when the marketer says I don’t want to be in the banner ghetto, the ad on the page, the wasp at the picnic. I want be part of the celebration, the reason people come to your site, and the experience. I think you’re talking about giving publishers a real sense of ownership and presence in the site and in the experience. Because of the blurring of the lines around content and integration, I think there’s a whole world of innovation that’s ready to happen there.
The Makegood: Thanks, Doug.