Should Advertisers Buy Digital Media From Traditional Media Companies?

As the owner of a full-service digital ad agency in Phoenix, I want to be crystal clear here that I don’t want this blog to be perceived as a hit piece for media companies who have launched digital ad sales efforts in order to augment revenue generation from their primary product.

It’s certainly not new but it is becoming more prevalent.

Advertisers and non-digital capable agencies can now buy a full suite of digital offerings from companies like Cox, Bonneville, Sinclair, and other historically ‘traditional’ media companies (i.e., those that used to only sell print, radio, and television). The sale of these products is stewarded by a sales rep and then executed by staff who are trained in digital processes. Sometimes the staff works for an entirely separate company.

Some traditional media companies claim to have special access or inventory in order to create greater perceived value for their digital offerings. That’s one way that it’s ‘sold’ to the client but that’s not really how it works. Without sounding contentious I’ll simply state that digital marketing success is driven by a sound strategy that targets relevant audiences with efficient use of a client’s budget.

There is no ‘special inventory’… saying as much is misleading and sales-y, in my opinion.

Why are traditional media companies selling digital assets?

This change in strategy from traditional media companies is understandable as a shifting landscape has negatively impacted the consumption of traditional media assets. Simply put, people are still watching videos and listening to audio – they are just doing so with a much wider array of platforms that they can readily access through digital means. It makes sense that a traditional media company that relies on ad sales revenue would look to add digital assets to its portfolio.

A well-run business should strive to retain relevancy and grow profit. Offering a comprehensive suite of digital marketing assets is one way that media companies can accomplish those goals.

Does traditional media selling digital media work?

I’d say yes. It’s most certainly working – that’s why it’s becoming more prolific and candidly, what else can they do? It makes sense for their business. They have reps with established relationships with advertisers and they’ve either created or established partnerships with digital media providers that they can sell into.

It makes perfect sense.

What’s interesting about this new wrinkle is the crossover. I have a broadcast rep in Seattle trying to sell me cable networks through their connected TV digital advertising service. I’ve got a radio rep in Phoenix who’s excited to talk to me about their digital video capabilities. Sure they still offer their traditional product but it’s almost seems ancillary to their digital offerings. This seems to be the new norm and it takes a little getting used to.

I’m not sure where this leads but my opinion is that it seems to be unsustainable for the long term. As television, radio, and print become more digitized and access to their inventory becomes decentralized … how, and why, would a station retain an internal sales department?

They would have to bake in operational hard costs, sales commissions, and profit. This will get progressively harder for them.

Are media companies trying to be come ad agencies?

Any entity that reps a product and is structured to generate revenue to achieve sales goals might not be your best choice when it comes to choosing a marketing company. Marketing in a time of great change is difficult enough.

Being a marketing professional takes more than just changing the title on your business card from account executive to marketing consultant.

As a marketing professional, I must scrutinize each vendor’s ability to deliver relevant audiences or execute needs as defined by the client’s current business conditions. A sales rep (or manager) who is incentivized to sell certain products is not in a good position to provide this level of guidance. Simply stated, other media strategies they don’t sell may be in the client’s best interest … do you really think they’ll make that recommendation with a budget number hanging over their head?

This is where experience matters. I’ll talk strategy all day with a Jim Knapp*, Becky Kaiser, Holly Olsen (no relation), Greg Parish, or Leslie Katz. I could go on by adding pretty much everyone I hired over to Cox Media. But I’m not likely to do that with someone who has little to no experience in marketing. So yes, there are people who work for traditional media companies that have sound marketing sense but at this point, I think they’re more of the exception than the norm.

How does this affect the long-standing relationships between agencies and media providers?

When media companies move to position themselves as agencies they become competitors. In its current state, I wouldn’t say that things are problematic but it is moving in what I would call an interesting direction. Whereas I see our industry as largely and appreciatively passive, I do see challenges on the horizon if these media companies move away from what they do best.

Just being real here. I didn’t get into this business because I was afraid of competition. Quite the contrary.

As I stated previously, this isn’t a hit piece. I have deep friendships with the people who work at media companies in both Phoenix and Seattle. I also hold no illusions that companies need to do what’s necessary to grow and be profitable. I most certainly don’t expect them to sit idle as the world changes. I welcome the competition. As with any competitive entity, their presence will motivate me and my team to be better.

I do think advertisers need to keep their eyes wide open when they are making marketing decisions. Any entity that possesses a sales-forward approach to providing marketing services may lead you to inefficiencies you can’t afford in today’s business climate. I also think that the transition from a TV station, radio station, newspaper, etc. to a digital marketing company is one where some will do it well and others will not.

Lastly and perhaps most importantly … we (ad agencies) do business with these media providers and in doing so, provide them with capital to fuel their efforts to ultimately compete with us. For agencies to remain dominant, we have to continue to improve, always take a holistic approach to our client’s needs, and possess a deep understanding of the market as well as their industry while providing the kind of customer service that clients value.

*Jim Knapp is not a rep, he is a marketing superhero and sometimes, he doesn’t agree with me which is 100% why I love and respect this man.