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Late last week, my partners and I here at Polaris Ventures hosted a summit for all of our portfolio companies in and around the online advertising sector. In addition to the some 20 portfolio executives that attended, we brought in a handful of senior industry execs to share their experiences, among them Joe Gillespie, EVP of CBS Interactive CBS/CNET; Michael Barrett, formerly of Fox Interactive Media; Carolyn Everson, EVP of MTV Networks; Scott Kurnit, founder of About.com; Stewart Bogarty EVP at Universal McCann; and Polaris entrepreneur-in-residence Brian Grey, who was formerly with Fox Sports Interactive.
Although our meeting had been planned several months ago, the fact that it came on the heels of some highly publicized admonishments by certain VCs to the CEOs of their portfolio companies to slash costs in order to survive the financial crisis provided an interesting backdrop. In particular, attendees of our summit overwhelmingly agreed that expense cutbacks are only half of the story when it comes to surviving the ad recession — the other half is figuring out how to build revenues. In no particular order, here are some tips that came out of the meeting:
10. Get close to your best customers. You know who they are. Be proactive: Double down your efforts to stay close to them and keep them on your customer list.
9. Figure out how to forecast 2009. Get your best sales guys together to figure out who will be spending what. Which advertisers are going to cut back, which ones will keep spending, which will accelerate to gain share? Don’t forecast from ’08 budgets — build from the bottom up. And keep revising.
8. Believe in endemics. If you play in a niche, focus efforts on endemic advertisers that need to be in that niche.
7. Find brands that are spending to gain share in the downturn. Yes, most advertisers are pulling back. But our group of experts have noticed that certain brands are viewing the downturn as an opportunity to gain share of voice, and so are actually spending more. Go find ‘em.
6. Turn remnant inventory into premium. Vanilla ice cream can either be seen as plain ole vanilla (in other words, remnant) or, when topped with a cherry and a little whipped cream, part of a sundae (in other words, premium). The same applies to ad inventory. One great “cherry” is to create events, which advertisers love. Be creative in crafting events, and then figure out how to recharacterize existing inventory, which ordinarily might be sold as remnant, as part of premium packages around those events.
5. Start early and aim high. When selling key sponsors, pitch them early in the creation process so they have a chance to be truly integrated into the program, and aim to get time in with senior execs from both the agency and the client.
4. Remember: It’s not about you, it’s about them. When pitching an account, remember that it’s not about your great technology or your brilliant innovation; it’s about the brand and their customers. Create a narrative about how you help them achieve their objectives.
3. ROI, ROI, ROI! Did I mention ROI? An ad recession doesn’t so much provoke a flight to quality as it does a flight to what advertisers know works well. Focus on measuring campaigns to show they work.
2. Mine your data. Advertisers love data about what real consumers are doing. You may not recognize it but you have amazingly rich data about your viewers. Capture it and share it with your advertisers (packaged to protect their identity, of course).
1. Hug your stars. Identify your best people, and make sure they know — and feel — how valuable they truly are.