After years of waiting, some false starts, and even more false hopes, it appears that the flow of advertising dollars to a large number of DOOH networks has begun in earnest. All signs point toward a significant influx in 1Q 2010. This follows on the heels of good activity in 4Q 2009, which was a bit of a surprise given the dismal environment in the first three quarters. This would seem to be great news for all network operators out there, right? Maybe so, but it also marks an inflection point with regard to how these networks go about managing their business. It is time to put down the ad sales shotgun, and pick up the rifle.
Many of the larger and more mature networks out there have a dedicated ad sales team working the major brands and agencies. That allows them to present a consistent pitch and rate card to potential buyers. Some, but not many, also have an outside agency working the street for them in tandem with the captive sales force. These folks understand the dangers of channel conflict, and do their best to avoid it. On the flip side, in an effort to grab any available ad dollars, many other networks have signed up multiple agencies and aggregators, conflicts be damned. This situation has become the norm, with network owners using the rationale that without an inside sales team, a “team” of agencies and aggregators makes sense. As we noted in October, that tactic has a limited shelf life. It is a topic worth revisiting, because it is important on many levels.
DOOH may be the only media channel where multiple agencies routinely represent the same property to ad buyers. It doesn’t happen in the traditional media, or on the web. It doesn’t happen because it does not make much sense to have it happen. Here’s why:
1. Media buyers don’t hide their intent to launch campaigns. In most cases, all players in the industry “see” the larger opportunities out there. Whether they capture them or not relates to how they position and price their offering(s). So having multiple agencies does not mean missing any big deals.
2. Having multiple selling agents only serves to confuse the buyers, and often results in different pitches, pricing, or terms. When this happens, buyers don’t know what to believe. With all the options open to them, they often opt for the less confusing route. We have already heard about this happening in DOOH.
3. Exclusive relationships force the agency to either perform or risk losing the account. Competitive pressure makes everyone better.
Digital signage networks are finally reaching the point where the viable properties are beginning to see consistent and growing demand for their ad inventory. At the same time, there is tremendous competition for those dollars both from other networks and from other media channels. To the extent that ad buyers are confused or irritated by mixed messages and repetitive pitches, they are quite likely to look elsewhere: in DOOH and beyond. Reality is that you will lose deals by having multiple outside reps. To make matters worse, because some ad sales agencies play games with pricing in an effort to differentiate… some selling at established rate card, some above, some below, you can bet that buyers who want a network in their campaign will force the buy through the low bidder. This only has the effect of driving overall CPM rates downward. And that carries over to other buys. You have enough competitors: it is not wise to add yourself to the list.
Agencies and aggregators know that the end game will include exclusive arrangements between a network and one outside agency, as it is in other channels. Having talked with several agency types, as well as with folks on the buy side, none are particularly worked up about the prospect of rationalization and consolidation. The selling agencies would rather focus on core properties without the noise of their competitors. Buyers want to have one avenue of access to a given network or group of networks. When the friction of multiple pitches is removed, the selling process will be smoother and easier. And that begets relationships, frequency and higher rates over time.
This, then, is a call to all digital signage network owners out there. If you have multiple agencies and aggregators representing you on the sell side, the time to select ONE is now. The reasons for doing so are quite real, and have spillover effects beyond an individual network to the entire industry. Your pitch and price structure will be consistent. Your ability to build a relationship with brands will be enhanced. Your reporting requirements will not be all over the board. Your ability to judge the actual performance of your agency will be enhanced. You won’t be left out of large buys for lack of exposure. And buyers will find it easier to buy. Make your decision on whatever parameter you think is best for you: past performance, cost, reputation, understanding of your segment and personal relationships all matter. If for some reason you believe that selling is a function best managed by technology and not people, then you can choose the owner of the “best” technology, and good luck with that.
If 2010 is to be a year when DOOH emerges as a viable channel for ad buyers, we need to do our best to make them feel comfortable working with us. Start the process by calling your multiple agencies. Tell them you are going to an exclusive arrangement in 30 days. Ask them why they should be the one. Most will welcome the opportunity. Then make the best choice for you. With that done, the discussion can move to the higher-order tactics of execution, compliance and measurement. At least then you will only have one outside firm pushing you on all three issues, working as a partner and making you both better.