Why and how to sell performance advertising to your advertisers

A few years ago, I was talking to a junior account executive on a southern California publisher sales force about pitching a cost-per-acquisition buy to one her clients who was already paying for impressions. Her immediate reaction was “No way, my advertiser is like, totally overpaying for this placement and I don’t want them to find out.”

I explained that if she worked with advertisers to get a higher conversion rate, she could actually get a higher eCPM than she was already getting. She looked at me as if I were an alien.

Later, we got on a call with a direct response advertiser, who stated that he would actually pay out a higher effective CPM on that placement if they could start buying on a CPA, because they would be getting the impressions that backed out for them, and they could spend more at a higher rate. I wanted to give him a big fat kiss. I could see realization dawning on the account executive’s face.  By working together with the advertiser, her inventory could provide the best value for them and they will re-invest more and at higher rates as a result.  

Why performance advertising
I still hear the same questions that the junior account executive was asking: why should I sell performance and how do I sell performance? More specifically, how can I sell performance to brand advertisers?

The frist thing to know is that performance advertising works and pays out. Publishers often tell us that it doesn’t and there’s no point in selling it—they don’t perform, advertisers don’t renew, it’s a lost cause. Performance dollars are growing—performance-based pricing grew by 11.8% in 2007, says the 2008 IAB Internet Advertising report—and that’s a lot of budget to walk away from. As a publisher, you have to make it work.

The beauty of performance ad products is that it’s not guaranteed—publishers can offer performance products without creating channel conflict, by offering it on non-guaranteed/unsold inventory.  It’s hard to dispute that the inventory is valuable and performs—in fact, this inventory is often monetized by ad networks, who consequently run performance buys against it.

Five steps to sell performance inventory
During a performance sales training at a large international publisher using Right Media, I was told that a top network in their market was selling their inventory on a performance basis and stealing their advertisers. The irony was that this network, and many similar networks, was using the same platform this publisher was using to optimize the inventory.

Publishers need to enable their sales force and ops teams to capture that performance and direct response budgets. Here are a few basic steps:

1. Stop guaranteeing delivery and performance. While they’re not mutually exclusive, if you don’t knowing how your inventory performs, you may set up the wrong expectations with your advertisers.
2. Negotiate for a test with new advertisers and campaigns, with minimum yield levels, timing requirements, creatives and placements. That way you both know in advance how your inventory performs with their campaigns.
3. Qualify campaigns based on campaign goals, creative quality, conversion path, consideration cycle, and success metrics.
4. Sell performance products but optimize on the backend to get performance and delivery—work with the advertiser to develop creatives, pricing types, adjustments
5. Adopt tools and best practices for optimization. Optimization is a balance between art and science—without the right tools, it’s a little too much Van Gogh.

Not sure where to start? If you need a little help, our Performance Sales Enablement professional service can give you some guidance.

Offline dollars are moving online, brand dollars are moving to brand performance, and advertisers are getting tighter on seeing performance results.  Advertisers care about their brand and always will, but they also care about results too. It’s time to offer products that advertisers want, and get disciplined about selling and optimizing them.

—Jeanne Hwang, Director of Consulting

Cars.com and Yahoo! help advertisers reach car buyers in more places

Online car shopping site Cars.com wanted to help automobile manufacturer advertisers extend their reach to target users shopping for specific cars beyond Cars.com—and found a way to increase clicks by letting advertisers target potential customers on Yahoo! pages, too. 

About Cars.com
Cars.com, a division of Classified Ventures, LLC, offers online ad solutions for automakers, dealers and private-party sellers in the form of classified advertising solutions, banner advertisements and lead-generation.

The problem
Cars.com wanted to offer its advertisers more frequency—and more inventory to choose from—but wanted a high-quality source that its advertisers could trust. An automobile purchase is a high-ticket, considered decision, and the traditional consumer shopping behavior is changing due to the economy. The time horizon has extended, as shoppers consider switching to a new vehicle category, and shoppers are more likely to visit multiple dealerships before locking in their decision on a make or model. So insulating the buyer experience from other manufacturers is now even more important to a manufacturer than ever before, no matter where they go online.

“We are a pure-play automotive site with comprehensive new and used car inventory, as well as editorial content that assists car shoppers in making an informed purchase,” says Joan Ritter, Director of Advertising Marketing Development at Cars.com.  “What this means is that the only reason someone goes to Cars.com is because they are in car-shopping mode—whether early on or late in the decision process. It’s extremely efficient in delivering a car-shopping audience.” What Cars.com needed was a re-targeting solution that would help it extend its capability to other inventory.

The solution
Cars.com formed a partnership with Yahoo! that lets it sell Yahoo! non-guaranteed inventory to its advertisers. “We were attracted to the Yahoo! name, as well as the fact that our clients didn’t view Yahoo! as an ad network,” says Karen Kurtz, Advertising Product Manager of Cars.com. Advertisers felt that Yahoo! would place their ads on higher-quality inventory than ad networks would, giving them advertisers more impressions and more control of their images. 

In addition, Cars.com can tag a user, including the type of car they were investigating and the regions they live in, and run ads for relevant cars when those users visit pages on the Yahoo! site. “On Yahoo!, we get an extra boost,” Kurtz says. “They may not be looking for a car at the moment, but we can serve them a brand reminder after their visit to Cars.com. Because the ad placement on the Yahoo! network is no longer on an in-market site, it is interruptive, and therefore click-through behavior can be impressive. For those manufacturers who make clicks to their own site an objective, this can be very valuable.”

The results
The Yahoo! partnership has dramatically increased the amount of impressions that Cars.com can offer to its advertisers. That, in turn, gives them more opportunities to reach users. “Yahoo! has 30 to 100 times the inventory that we do,” Kurtz says. “We can present it to advertisers as an upsell to help them extend their brand.”

Cars.com says that the partnership and its retargeting capabilities has made it simpler for advertisers to get their ads in front of the right kind of customers. Automobile companies can buy Yahoo! ads for users who checked out competing cars, a practice called “conquesting” that Cars.com typically doesn’t allow on its own site.

Says Ritter: “We consider the Cars.com Yahoo! re-targeting buy to be the ultimate one-two punch solution for both local dealerships, as well as for manufacturers. It marries the Cars.com quality audience to the Yahoo! distribution network. And our advertisers and agencies are excited about the ability to get such a powerful ad buy in one fell swoop.”

— The Team

Yahoo! talks to publishers about managing multiple sales channels

Yahoo!'s Professional Services team is everywhere these days. Last week we blogged about several events Yahoo! would be participating in, an IAB Professional Development class about Managing Multiple Sales Channels being one of them. The class, led by Marc Grabowski, senior director of network sales, and Jeanne Hwang, director of consulting, helped publishers and networks set up their sales teams to develop ad packages that cross sales channels and maximize their inventory. Luckily for me the class was in San Francisco: No travel required!

Within the first few minutes we heard why attendees had given up three hours of their day to be there. The reasons the attendees gave ranged from getting a handle on yield management to developing streams of new ad revenue to dealing with channel conflict. With this industry changing as quickly as it is, I understood where these people were coming from. Luckily, Jeanne and Marc had a few tricks up their sleeves to deal with these issues. The three biggest takeaways were:

Times, they are a changin'
The industry is undergoing a dramatic shift. Marketers are becoming savvier; they have fewer ad dollars to spend but have more metrics at their fingers than ever before, and they want results. Over the last few years we've seen a shift in ad dollars from brand to performance. Roll in agencies' demand for more transparency, and you can see how this is causing a pain point that publishers and networks must address. Bottom line:Publishers and networks must become savvy sellers of performance advertising.

Just say no
Successful sales teams work with marketers to identify the goals of a campaign but, more importantly, they help determine if the campaign is likely to see success on their site or network.  Is the marketer looking for clicks or conversions, and what are those worth? Who is their target audience?Does the creative have a clear call to action?Is the conversion path short?Does it require minimal registration information that is easily provided (Such as a zip code as opposed to a social security number)?Bottom line:If the answers to the previous questions point to a bad campaign, sales teams must learn to just say no.

Differentiate to survive
How do you avoid conflict among channels that are selling the exact same inventory?You don't—it's inevitable. If marketers are able to access the same inventory from multiple sales outlets, they can take the lowest price, ultimately degrading the value of your inventory. You can fight slipping CPMs by allowing different channels to sell different slices of inventory determined by targeting, frequencies, properties, and so on.  Bottom line:Differentiate what sales channels are able to sell to help avoid conflict.  

—Megan Bergtholdt, Engagement Manager

Yahoo! Professional Services offers new performance and display advertising services

Do you ever get the feeling that the advertising world might be leaving you behind? Whether you're a publisher, an agency or an ad network, it's getting tougher to give your advertisers what they want. This week, Yahoo! Professional Services is announcing two new services—Display Extension and Performance Sales Enablement—that can help you capture more brand performance ad dollars.

Our Professional Services team works with the first and the largest exchange in the world, which conducts 8 billion transactions a day, and we provide advertising solutions that can help give you an edge in the business. We have several offerings, but today we'll focus on the two new services.

Display Extension
You may be a search agency or network who's dabbling in display, or who simply wants to offer your clients more options. Either way, you'll want to think about combining search and display in a single powerful solution:  Display Extension.

Search and display are more powerful together than they are apart. According to a December 2006 comScore study (“Close the Loop: Understanding Search and Display Synergy”), users who have viewed both types of ads are 244% more likely to purchase something online and 89% more offline compared to users who haven't seen either. That's stronger than either search or display separately.

Display Extension lets you target display ads on the Right Media Exchange to users who have clicked on your search ads on any search engine. So you get the visibility of display ads on our robust xchange in front of users who are looking for what you offer. Our assist reporting gives you insight into your advertiser's sales funnels, so you can understand the contributions of both search and display. We offer you creative services and consultation to help you package your search and display products together.

Performance Sales Enablement
Advertisers are watching every dollar they spend, and they increasingly want to pay only for ads that are performing for them. If you're a publisher, that means you need to be offering performance-based pricing.  Performance-based pricing grew by 11.8% in 2007, says the 2008 IAB Internet Advertising report, where as cost-per-impression pricing shrunk by 13.3%. But shifting to performance pricing is not easy to do without help.

Creating  a successful performance-based program isn't just about changing how you charge—it also means you have to transform your business operations and your way of selling.  And that's where our Performance Sales Enablement  offering comes in. We train your sales force, develop messaging for your advertisers, analyze your inventory and help you create performance-based advertising packages.

What can you get out of all of this? Well, happier advertisers, since you're giving them what they ask for. But you can also get more out of your inventory by capturing more performance dollars. You'll be leaving less of your money on the table.

You'll be hearing more about both solutions and others in the coming weeks. In the meantime, visit our Professional Services website  to get started with us.

—Megan Pagliuca, Director, Consulting Services

Capitalize on our expertise with Yahoo! Professional Services

Before I joined Yahoo's Professional Services team, I told my mom about the job. Her exact words: “'Professional Services?' It sounds…. Illegal.” Not the case. I guarantee that while I've seen the team push the limits of possibility when it comes to yield management, I've yet to witness any illicit activity. Moms of the world, rest assured.

I must admit the term “Professional Services” is elusive. Wiki it, and see what you come up with: “Professional services are infrequent, technical, or unique functions performed by independent contractors or consultants whose occupation is the rendering of such services.” Infrequent—really? Then why am I working 20 hours a day?

So let me attempt to provide some color around the incredible team of kick-ass professionals we've assembled at Yahoo!, and named (sorry, Mom) Professional Services.

Our experience is now yours
Yahoo! hasn't talked much about our Professional Services, but starting this week you'll start hearing more from us about them. Our Professional Services team works with the first and the largest exchange in the world, which conducts 8 billion transactions a day, and that all adds up to a lot of experience that can benefit you.

What can Yahoo! Professional Services do for you? We can give you the guidance and tools to fine-tune your advertising strategy.  If you're a search agency, you can work with us to start offering display. If you're a publisher who's been leaving money on the table, we can help you pick it up. We engage our partners in every aspect of their online advertising business, and offer services including customized technology solutions, outsourced business processes and strategic consulting services.

What we do for you
We help you move to the Right Media Exchange, of course, but that takes more than just a technology change. We work with you in three areas:

Design: Before we get technology involved, we work with you to understand your needs and design a solution specifically for you. We worked with one publisher that sold just 35% of its inventory and suffered dropping CPMs. We tailored a solution for them that used Right Media technology and our professional services to give them the ability to have their salesforce sell performance products, to build valuable user populations, and to extend their business with a display network strategy. With our recommendations, their $300,000 quarterly revenue gap turned into $1.4 million in new business.

Deployment: The heart of our services is getting publishers, agencies, and networks running on the Right Media Exchange. We help participants adopt the technology, and then we show them how to take advantage of it. For example, we train sales forces about the different pricing types on the Right Media Exchange, and then we help them turn that pricing knowledge into a revenue optimization strategy.

Consulting: We work with companies to help transform their advertising models. For example, we may help a search marketing agency move into a brand new ad business by working with them to build a display practice. We help both agencies and publishers build media trading practices that can bring significant increases in margin.

Visit our Professional Services website to learn about the good things we have going on. That means you, too, Mom.

—Rachel White, Director of Professional Services