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Price Objection over Online Ads

Posted on Thursday, October 14, 2010 at 12:22 PM

Are you having trouble getting decent rates for online advertising? If so, you are not alone. Here's an analysis of the problem -- and some tips on how to solve it!

By William Dunkerley

A lot of publishers are saying that they just can't get a good rate for online advertising. Advertisers want to pay less. At the same time, publishers are looking to make up for recessionary fall-off of print advertising. And getting more revenue online seems like an answer to many. But, how can you deal with the persistent price objections?

Let's analyze what's going on here.

I find that there are two factors involved. The first is the sales methodology used by the publishers. In many instances, it is just not up to the challenge of selling online advertising. The other factor is the online advertising itself. Unfortunately, many publishers are not offering advertisers good value with online ads. For a variety of reasons, online magazine ads in many venues are relatively ineffectual for the advertisers.

The Sales Methodology

The sales team of one publisher was telling her that they needed to cut the online ad rates. Why? The advertisers were telling them that this publication's rates were too high. Maybe they were too high compared to an online competitor, or perhaps they were just plain too high. The sales team sought to remedy this by acceding to the advertiser demands for lower rates.

At another publication in a completely different field, advertisers were telling the sales people that they simply didn't have the money to spend on ads. Recession had hit their businesses. And, if they weren't making money, they couldn't be spending money on online ads. The sales team at this publication wanted to start offering deep discounts in light of the economic circumstances.

Price. Price. Price. That's certainly a common objection these days. Are your sales people encountering it, too? If so, here are a few tips to consider:

1. Are your sales people unwittingly prompting that objection? There's no doubt that many advertisers are spending money cautiously -- and they're letting sales reps know that. But, after hearing the price objection a number of times, a salesperson may go into a sales call anticipating the objection. As a result, he introduces the subject of price early in the conversation. It's an attempt to head off the price objection and avoid rejection. Talking price before the prospect is convinced of benefits, however, is almost always a mistake. In fact, the more the salesperson talks about price, the more likely it will become a source of objection.

2. "Your rate is too high" and "I have no money" are often code words for "goodbye." In other words, the advertiser is trying to end the conversation. She hasn't been convinced that online advertising in your publication offers any concrete benefit. Price isn't the real objection. The problem here is that the advertiser hasn't been sold yet. So, responding with a justification of the rate or suggesting a discount can be just a waste of time. The code words for "goodbye" are often invoked when the salesperson has done an inadequate job of probing the prospect. The salesperson doesn't know what the advertiser's goals are. As a result, he can't tell the prospect how advertising in your magazine can achieve those goals. So what can be done to rescue this sales call? Re-probe the prospect. Pick up on something that seemed to be of interest, and get her talking about her marketing objectives. Present a few targeted feature/benefit statements. Then, go for a close. Don't revisit the price pseudo-objection. Just go for a close.

3. In the rare situation where the advertiser honestly believes that he can't spend money on ads because he's not making any money, there is opportunity for a different approach. Educate the advertiser. Successful advertising is not an activity that is loss-making. It is profits-producing. Failing to spend money on efficacious advertising will only perpetuate a company's weak financial position. Worse, it can even create a downward spiral. Effective advertising is a way out; it leads to new business. Find ways to drive home these points, and your prospect will see why it is important that he spend money to advertise in your publication.

The Online Advertising Itself

Many advertisers are refusing to accept publishers' online rates because the online advertising isn't paying off for them. You may be able to quote how many exposures they are getting or cite click-through statistics. But an advertiser can't take those numbers to the bank. What an advertiser is usually looking for is orders. In the case of image advertising, it is benchmarked survey results that demonstrate impact. When considered in these terms, server statistics don't really mean much. What's more, they are often inaccurate. Efficacy is what's important.

I know that some advertisers actively look for server statistics when deciding where to advertise. But sooner or later, things will come down to efficacy of the advertising. If the advertiser spends a lot of money on click-throughs and exposures that produce inadequate results, he may learn the folly of his ways. And if you sold yourself based on server stats, you might come up short. It would be better to have sold your online advertising based on efficacy.

But that raises the question: is advertising with you online efficacious? Will the advertiser get results in terms that really matter?

Too many times, the answer to that question is no. The online ads are bearing no fruit (or at least insufficient fruit). Why is that so? Here are a few reasons why some online advertising produces inadequate results:

1. The ads aren't big enough. It's a well established fact that, in advertising, effectiveness is proportionate to the size of the ad. That's why a full page in a print publication out-pulls a tiny fractional. A lot of online banner ads are the digital equivalents of tiny fractionals. They're not going to produce big results. Online advertising really got itself into a rut with the preponderance of banner ads. If you want your advertisers to see results from advertising with you online, sell them big ads.

2. Some ads have no fixed location. They are served dynamically as members of a sequence. Now you see it, now you don't -- the next ad has been served. What's wrong with that? It has to do with repeat exposure. Repeat exposure contributes to advertising effectiveness. When an ad has a fixed location, readers will re-experience the ad as they navigate back and forth in your publication. If an ad is not there all the time, it misses that reader-initiated re-exposure. And what if the reader remembers an ad and wants to revisit it? If it's still where she saw it before, she'll have a chance of finding it. If something else is in its place, that ad has missed another chance at repeat exposure. Give your advertisers the best shot at repeat exposure. Give their ads a fixed location.

3. The wrong people are looking at the ads. Advertisers want exposure to qualified, prospective customers. Sometimes in the rush to boost server statistics, a publisher will take steps to boost traffic, any traffic. And that can result in pairing advertisers with readers who have little interest in buying. Hitting a targeted audience is just as important online as it is in print. Reader acquisition generally costs more in print than online. That tends to make publishers rather judicious about acquiring a well-targeted audience. Lower-cost online audience promotion can lead to a less stringent approach. That in turn garners a less qualified audience. If you want to acquire and sustain the interest of advertisers, be sure that you are aggregating for them an audience of qualified buyers.

Earlier, STRAT carried a two-part series entitled "Why We're Not Seeing More Online Ad Revenue." It expands upon the ad-related issues I've been talking about in this article. Here you can see Part I and Part II.

Sales methodology, and the advertising itself. Those are the factors that are stimulating many of today's price objections with online advertising. Use the tips presented herein successfully, and you can see those price objections drop by the wayside.

William Dunkerley is principal of William Dunkerley Publishing Consultants, www.publishinghelp.com.

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