2016 Media Ad Sales Study: Accelerating the Transition to Solution Selling

The Alexander Group (AGI) recently conducted the 2016 Modern Media Ad Sales Study, a survey of media companies in the pure-play digital, integrated print and integrated broadcast spaces. The study confirms that the digital media ad sales industry faces unprecedented levels of change. As advertisers demand more targeted solutions, publishers are struggling to adapt. Programmatic buying enables advertisers to purchase ad space for less money than ever before, reducing profits for publishers. Furthermore, audiences today consume a wider variety of media content from an increasing number of sources, thus commoditizing digital media ad space. How are digital media companies coping with these changes? The most successful companies are accelerating their shift to solution selling and providing the tools to tackle these challenges.

Advertisers today demand that publishers provide a diverse product portfolio and the ability to measure return on investment (ROI). Publishers have responded by increasing the size of their product portfolios: for example, integrated broadcast companies have increased their number of offerings by 155 percent on average. This growth of product portfolios encourages account executives to use solution selling because it enables them to determine which products achieve their clients’ goals. (See Figure 1 below)

Figure 1

In a solution selling model, account executives utilize their extensive knowledge about their clients and the industry to craft unique solutions that help the client reach their business goals. To enable sellers to be successful in solution selling, sales organizations are 1) redefining the account manager into a true selling role and 2) investing in sales support. Both these changes shift responsibilities away from account executives to give them more solution selling time. (See Figure 2 below)

Figure 2

The Evolving Role of the Account Manager

In a product-focused selling environment, the account manager is often an operational role responsible for campaign fulfillment and other sales administrative duties. In a solution selling model, the account manager commonly evolves into a true sales role. When making this transition, account managers increase their technical knowledge in order to interact with agencies and other media buyers. They also learn to coordinate internal players across more complex sales models. With these new skills, account managers are able to resell and upsell more effectively. It also enables account executives to focus on executive-level consultative selling with chief marketing officers and agency executives. On average, companies where the account manager’s role has changed have seen the amount of time account executives spend on consultative selling activities triple between 2013 and 2015.

Publishers Are Adding Significant Sales Support

To further offload non-selling responsibilities from account executives, solution selling-oriented publishers often invest in sales support. While expensive in the short term, sales support can produce a strong ROI, allowing account executives more engaged selling time and ultimately higher revenue productivity. In our study, solution selling models reported spending 6.5x more on pre-sales activities than traditional product-focused models (as a percentage of total headcount costs). Pure-play digital publishers, the most dynamic and fastest growing sub-segment in AGI’s study, are on the leading edge of the sales support investment trend; they average 63 percent more support per account executive compared to integrated broadcast and 139 percent more compared to integrated print. But integrated print and broadcast companies are also feeling the pressure to increase their support headcounts. Overall, 78 percent of participants in the 2016 Media Ad Sales Study are increasing or planning to increase support headcount. (See Figure 3)

Figure 3

Revenue Growth Using a Solution Selling Model

While participants have told us that solution selling is overall beneficial to their revenue growth, many have concerns as they continue to make the transition. Eighty-eight percent of participants feel their account executives need to improve skills in communicating the value propositions of the various products within their portfolios; 65 percent are concerned that AEs may continue to focus on selling antiquated ad products instead of newer, more complex products.

Despite these concerns, many ad sales organizations continue to push towards solution selling because they believe it will help them accelerate revenue growth. And as solution selling has become more common over the past two years, revenue per rep in the ad sales industry has been increasing, suggesting that many publishers have been successful in this challenging media ad sales landscape.

Originally co-authored with Matthew Rosenthal.

Learn more about AGI’s solution selling in media ad sales and benchmarking your sales organization.

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