It’s not exactly news that programmatic advertising, automation and agency consolidation have upended the media industry. Such changes have been well documented (as well as felt personally by many of our colleagues).
But change, like time, marches on, and these trends continue to turn the media world upside down. Exhibit A: the sales organizations of media and digital ad tech companies that sell to agencies. Programmatic and consolidation have imposed a new sales team structure, though many not quite realize it yet. Any organization that sells to agencies, and seek that all-important master services agreement (MSA) with any of the holding companies, will need to adapt their organizations to the new reality.
In the old days (by which I mean just a few years ago), the sales organization inside of a media company, ad network or any other entity that sold into an agency needed to be vertically aligned with the agency. For instance, GroupM has many agencies under its umbrella, and some of those agencies have multiple sub-agencies. Each agency, and sometimes even the sub-brands, acted as separate entities to sign their own contracts with media owners (or ad networks and digital ad companies).
To support these multiple contracts, the media sales organizations had layers of employees. There are executive-level salespeople who negotiated and signed I/Os with an agency or sub-agency; senior-level managers who oversaw the relationship; and legions of staff who took care of the day-to-day business of processing I/Os, executing campaigns and providing general agency support.
But as programmatic took off, as agency consolidation accelerated, and as brands began to squeeze margins, the holding companies realized they needed to drive efficiency. One strategy — which is occurring as I write this — is to replace the multiple I/Os with a global MSA at the holding company level. This approach requires less administrative overhead, lends itself to the potential of automation and provides both sides more ability to negotiate services and costs with the sellers.
As a result of global MSAs, seller sales teams can function with a new streamlined staff. They essentially need executive-level employees to negotiate the global MSAs, a rank and file sales staff who can provide the day-to-day support to get deals closed and live.
This change is notable for a few reasons. First, contrary to popular belief, programmatic and automation haven’t eliminated jobs, though it has changed the jobs themselves. Sell-side sales team members are just as busy as ever, albeit they’re doing different things.
Second, the required skill set of the executive-level salesperson is now far more complex. It’s one thing to negotiate an MSA with a sub-agency, it’s another animal altogether to negotiate one across a global holding company that spans many countries and sectors. Add to that, the holding companies are bombarded with requests for MSAs, and the executive level salesperson must figure out a way to distinguish his or her company from the rest of the pack. That takes some imagination and foresight.
What does this mean for sales organizations?
Without a doubt, sales organizations need to position themselves to this new world order. Doing so requires three main actions. First, they must organize around an executive-level salesperson who has the necessary skills to make those MSAs happen.
Next, that executive must learn and understand what it takes to create those agreements and get those deals signed. This isn’t an easy task given that the individual must understand the inner workings of a holding company along with their requirements for brand safety, SLAs, measurement, verification and so on. Add to that, this executive must articulate to the holding company why his or her company is unique and worthy of the MSA.
Finally, some reorganization is required. The senior-level salesperson, in particular, will need to be redeployed, as his or her function is essentially going away. I suspect many or most have tech skills that can easily be repurposed within their organizations.
I share this insight based on our team’s experiences working with agencies in the sincere hope that sales organizations begin making the necessary adjustments so they can be even more successful selling in ideas, concepts and products so that they can grow their businesses.
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