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Direct Sales or Partner on Ads

July 26, 2012

One of the mistakes that many publishers make is to hire a direct sales person when partnerships could work better. Publishers often make the mistake of believing that their content and audience is unique in some way and that they need to hire a direct sales-person to take orders. In a world where advertisers can buy huge online ad volume from Facebook or from ad exchanges it’s harder for a publisher to convince advertisers that they should pay a premium for their unique content and audience.

On the flip-side their is an abundance of ad partners that want to work with publishers and a publisher that has significant reach can negotiate favorable terms given some efforts. A good ad partner might have 25, 50, even 100 or more ad sales people in dozens of cities and countries. So publishers need to ask themselves do they have the resources to replicate that.

An additional consideration is that ad sales is so specialized. You have Web banners, text and search, affiliates, mobile ads, video ads, and more. So the publisher needs to have a sales team in different geos, and also specialists for these domains.

Finally, unless your business is super exciting to the best ad sales people and they are going to take home high six figures per year, you will have a hard time recruiting top ad sales talent and you might expect to churn through sales people.

Publishers often make the decision to hire direct sales people because they see that math that they are getting $1 CPM from Adsense and they hear they can get $10 via direct sales.  As poor as the ad network rate might be there is no cost to it and its close to 100% fill rate. A direct sales force will take a while to close deals, and the sales person’s package will cover a good chunk of that upside.

Maybe the best reason to hire a direct sales force is if you want to develop a unique ad unit. You won’t be able to work with an ad partner on this as they are selling standard ad units for the most part. Launching a unique ad unit is a big risk as your sales team will need to convince ad agencies to take a chance with you. There are few business – Twitter, Facebook, Stumbleupon – that can make this work so unless you feel you are in their league its probably not something you want to jump into.

Publishers can develop a meaningful competency at managing ad partners and that can take them further with less risk than being an ad sales machine.

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