Thirty media ad sales leaders joined Alexander Group’s Media Ad Leadership team on September 18th to discuss challenges, share ideas and brainstorm strategies on how best to manage the 2020 Political Ad Sales category.
Companies included a cross-section of large broadcast, radio, integrated print, digital and content providers as well as emerging CTV and OTT players. The 90-minute session included polls and dialog on the following eight hot topics:
- What is different about this season’s political ad sales environment?
- What are your biggest challenges to managing political ad sales?
- Are you limiting your ad products, targeting or frequency limits?
- How are you managing FCC broadcast rules and ad guideline compliance?
- What type of jobs are you using to cover political advertisers/agencies/DSPs?
- To meet increased spend, how are you staffing up your political team, if at all?
- What sales compensation design practices do you use for your primary political ad seller?
- Given unpredictability, do you use any special sales compensation solutions?
1) Key Differences
This political cycle is very similar to past seasons with high local spend, back-end loaded buys, and lots of volatility. However, there are some unique differences including more national spend, increased spend on CTV and OTT given all the ‘cord cutting’, more early placement, and more issue campaigns (e.g., African American causes). Attendees shared that the industry is being more ethical (“not making audience feel uncomfortable or manipulated”). Lastly, the competitive landscape has changed. There are many newer players like SlingTV. Some companies like Google and Facebook limited their targeting. And others like Twitter have exited political ads business.
2) Biggest Challenges
Attendee’s notated that their top three challenges include managing the unpredictable spend (50%), managing ad guidelines (38%), and forecasting demand (38%). Other challenges include managing spend velocity (25%), managing spend cancelations (25%), managing spend windfalls (25%), managing share of voice/frequency (19%), and scaling the organization (13%).
3) Product, Targeting and Frequency Limits
67% of companies limited their products, targeting and/or frequency limits associated with their political category, however practices vary.
- 40% are only selling some of their offerings. For example, one newer entrant is only doing PMP (no direct or programmatic). Another attendee has publications that will not allow videos on their home page.
- 40% are limiting some of their targeting capabilities. While some are limiting their targeting, others have scaled it up to meet demand. State and local players typically need more targeting assistance than national players. One attendee cautioned to not over target. “Need to optimize targeting and not overdo it; use 1-2 layers plus geo.” Another attendee warned that data focus will recede later on as advertisers scramble to reach customers and use budgets.
- 27% are adding additional frequency limits to their political category than other categories. One company uses a new “fingerprint technology” to manage user experience. Other comments include “no 100% share of voice” and “1 ad per pod.”
4) FCC Broadcast and Ad Guideline Compliance
Attendees shared that they adhere to FCC’s political broadcast rules and other typical ad guidelines, including no “hate speech,” no violence, be “truthful,” and does not dissuade voting/census participation. Many companies even apply broadcast FCC rules to their non-broadcast products (“Is it approved for broadcast?”). Companies invest in fact checkers and legal teams to review creatives before going live. Attendees commented that they share controversial actions (e.g., to take an ad or not take an ad) with corporate communications in case it ultimately requires PR attention. Programmatic is more challenging to fact check; it requires educating DSP partners, reviewing creative beforehand, and deploying compliance resources to monitor the platform 24×7.
5) Political Ad Jobs
The type of jobs used vary based on company size and solution offering. In fact, more than half (57%) use multiple jobs. Practices include:
- 64% use a generalist AE
- 43% use a political vertical AE
- 50% use a separate programmatic team
- 20% leverage a 3rd party outsource vendor
Many companies use a dedicated national team in Washington, D.C. Companies will use either dedicated or generalist local team. Given current virtual trends, some attendees shared that it could be feasible to cover D.C. political advertisers and agencies remotely if able to form a trusted relationship.
6) Staffing Up the Team
Most companies are staffing up their sales teams to support the peak demand, however practices vary. Two most common options include using additional support resources and using additional generalist AEs (43% each). One attendee is using political overlay SME’s within inside sales team to focus on state, city, county spend. Other options include hiring new AE’s, move AE’s over to political team, and ramping up outsourced team.
7) Sales Compensation Practices for Primary Seller
Plan designs will vary based on a company’s phase of growth, solution offering/pricing model, reward philosophy and job design. Pay mix for the primary political ad seller varies between 50/50 (31%) and 70/30 (23%) with the most predominant solution in the middle at 60/40 (38%). Split practices between individual and team revenue metrics (46% each). Most predominate performance period (quota period) is quarterly (62%) followed by annual (23%). 92% apply a threshold level of performance before they start providing payouts. Lastly, 77% do not cap payouts and allow unlimited upside opportunity.
8) Special Sales Compensation Solutions for Political Team
Although there is a lot of unpredictability in spend, most (69%) companies do not provide a special sales compensation solution for their political ad sales team. Most common reasons include use a generalist AE model, use a team measure, use quarterly quotas, have a mature business and forecasting capabilities. For example, many companies track campaign spend (“follow the money”) to forecast demand; some advanced orgs are using sophisticated AI tools to improve accuracy. If they do deploy a special compensation practice to manage the unpredictable spend, the most predominant solution is team goals (31%), followed by cap or windfall protection (15%), different goal period (8%), and other (8%).
Conclusion
General advertising spending is down, however certain ad sales sectors like political is up dramatically. Although selling to this marketplace is complicated, companies are stepping up to the plate to maximize their revenue growth.
Interested in a briefing or would like to speak with one of our Media Ad Sales Practice leads? Contact us today.
Author
Rachel Parrinello is a principal in the San Francisco office. She is a leader in the firm’s Sales Compensation, Media Sales and Technology practices. In this role, Rachel delivers sales compensation expertise to many client engagements and directs the firm’s sales compensation IP and benchmarking methodology. Rachel’s fact-based, practical and aligned sales compensation solutions help her clients drive profitable revenue growth. She frequently speaks on sales compensation topics at various associations and partner events. Rachel has authored several articles and whitepapers including How Revenue Planning Drives Sales Compensation Success.
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