The new 'super buyers' of ad space

Folio: The Magazine for Magazine Management, March 1, 1997 by Josh Gordon

Meet the new super buyers of ad space: They buy in big volume, they do not have a lot of time for relationships, they will beat you senseless on rates. If your client base has been consolidating, you may have noticed the emergence of these super buyers. They don't need a lot of selling, they show up ready to buy, and they buy aggressively. Suddenly, the tables are turned: How do you approach selling when your client is the aggressor?

* At one company I've called on, the person who buys the ad space is not trained in advertising or marketing; rather, she is a highly skilled commodity buyer. Yesterday she was buying connector lugs and machine brackets, today she is buying ad space, tomorrow she will buy adding machines.

* One major computer company consolidated all of its media buying at one super ad agency. It's rumored that the agency gets less than the traditional 15 percent commission for evaluating and buying the ad space, but it does get a huge amount of consolidated media business.

* Another advertiser, from whom I get no business, talks about becoming "marketing partners" and makes this offer: He will buy as much ad space as I will sell him at rates so cheap, they are, at best, a break-even proposition. The benefit to the magazine is that he will give us the pages exclusively, and it will be consistent business. In short, he will give us marketshare and cashflow in exchange for pages sold so cheap there is no profit.

In these three situations, media buying has been reduced to the most pragmatic terms, and the romance of the "magazine sell" is history. The people doing the media buying have a huge amount of work to do, and need to do it efficiently. Their message to you: "Forget lunch, just get me to the bottom line without a lot of fuss."

How to stay out of trouble

The best solution to this problem is prevention: Don't fall into the commodity-buying trap in the first place. You're vulnerable if your magazine fails to differentiate itself to buyers in ways that have true value for them. If there is no value being added to the selling process, it only makes sense for clients to throw you into a commodity-buying process. The most successful publishers I see are adding value by bundling their ad space with unique services such as can be offered in a Web site, at sponsored conferences, or with research opportunities that your publication alone can provide. Short-sighted publishers discount these kinds of "add ons" as unprofitable distractions. But if they break even and offer a way out of the commodity trap, they are a big win.

If you face the commodity buyer, here's what I recommend:

Find out what the buyer wants to buy. Commodity buying is about buying a well-defined product at the lowest price. The buyer probably has very specific directions, and most often, there is little room for creativity or deviation. You will be at a real advantage if you can find out her instructions before you walk in the door. Call ahead and ask about this so that you can prepare.

Do some of her job for her. Space buyers in these situations are typically under tremendous time pressure to make many good decisions quickly. Let the pressure work to your advantage. If you have a good numbers story, crunch the numbers out and present them in side-by-side charts. Often this is the kind of work the media buyer is going to have to do anyway--and if you can save her the time and trouble, she will be grateful.

Sell the quality of your magazine in instantly recognizable firms. Somehow you have to present the quality factors in simple terms that will make immediate sense to the buyer. You have two strikes against you. First, there is no relationship to build from; and second, there is typically little understanding of your market. You will have limited time and often only one shot. Sometimes it is about positioning your publication so that it makes perfect sense in terms of the buyer's needs. It can also be about proving the value of your publication in immediate bullet-proof terms. If you don't have this kind of documentation from your publisher, ask for it.

If you fail at the differentiation game, the following events are likely to occur: First, the client will hammer you ruthlessly on rates. In extreme cases, the client will dictate the terms of the buy to you: "We will buy a ton of ad space from you, but here are the terms--take them or leave them." Second, the selling you will find yourself doing will be not to your client, but to your boss to get him to lower rates to the point where the client will buy.

The sales-shocked future

If you want a chilling vision of the long-term implications of all this, I recommend reading Sales Shock by Consultative Selling[TM] guru Mark Hanan. Hanan paints a picture of the future where this kind of buying is the rule, not the exception. He describes how Wal-Mart realized that the salespeople who called on its buyers added cost, but no value. Wal-Mart then refused to deal with salespeople, and during negotiations would deduct the anticipated commission the salesperson would have made from the cost of the product. Hanan says he is convinced that these days are coming for publishers. His suggestions: