Publishers vs. ad agencies, it's a topic that's coming up more and more often these days. Now, more than ever, both business models are going after the same pool of customers.
On the publishing side of the mix, there are a number of approaches that publishers can take to expand into agency services. Some choose to dive in feet first and acquire a digital agency. Mike Dragosavich, Founder/Publisher of Spotlight Media, on the other hand, favors a bootstrap approach that has resulted in continued growth and success. In the end, his measured tactics are helping Spotlight to beat ad agencies at their own game.
We sat down with Mike to ask him how he began taking on agencies and why he feels it's so vital to do so to achieve success in today's marketplace.
Start Offering Ad Agency Services That Pair With Publishing Strengths
In Mike’s case, he knew Spotlight had a built-in list of clients that were ripe for marketing agency services. His team put a focus on expanding their roster of services, and they laid the groundwork to scale their processes. Namely, this meant implementing some serious project management and employee training to ensure client satisfaction.
As they started to roll out agency service offerings, Spotlight first focused on logical upsells. For Mike's team, this meant studio head shots. “[We offered a] 12-month full page ad with a monthly employee feature. We threw in head shots to help with recruitment.” Now, his studio does 7-8 head shots per day. “Once you start these services, [your advertisers] like you, and they’ll use you again.”
Mike took a similar approach with video. At $4000 per edited minute, he saw immediate value versus a harder-to-sell $5000 website. In the end, the profit from video justified a full-time hire for the team. Mike adds that the role bolstered his core business as well, “You can use [a videographer] to do video for your own sales process and your sales team, about your products and advantages.”
In fact, Mike strongly believes videography is the perfect gateway for publishers to get into marketing services. “I would 100% get in on video. Get a videographer. It’s not going away. It’s also hot during COVID.”
Do Your Homework With a Consultative Sales Approach
Magazines that offer marketing services stand out in a crowded B2C advertising landscape. While B2B remains strong in print, it’s a “warzone” in consumer magazines, due to the sheer number of channels marketing managers have to choose from.
Mike approaches each sale with an educated package approach. His pitch: “You can hit the demographic you want. We can package it, and we can put it together. That’s how we’re winning.”
One example of this approach: targeting businesses expanding into the Fargo area where Spotlight Media operates. His sales team targets incoming business owners and hits them with an all-inclusive list of services at the right time. His pitch looks something like this:
“We have a great package for businesses in [the expansion] process. We can help you in the recruitment process. And when you launch, we’ll give you a ton of value-add to blow up your business. Here’s the price. We’ve given you value, we’ve given you rates, and we’ve given you the types of services you need."
Selling Marketing Services as an Alternative to Marketing Hires
Another interesting sales concept rooted in the publishers vs. ad agencies mindset: Spotlight is experimenting with expansive service packages that rival a full-time in-house marketing hire. Mike explains, “We are saying, 'pay us $70,000 a year, and you get an entire team versus one person with a limited skill set.' All of these jobs are long-term investments, we try not to sell on a project-by-project basis.”
While his team is still weighing out the exact ROI of this approach, his studied approach to service expansion continues to be an asset: “We’re investing more time into time tracking to really determine the [margins and markups on these services]...Don’t take out a huge loan and hire a bunch of people. Figure it out as you go along in a way that you can afford.”
Publishers vs. Ad Agencies: Marketing Services Add Value at Every Step
Magazine publishers bring a lot to the table. They are stocked with master storytellers, powerhouse creative teams, and deep audience knowledge. But in a competitive advertising environment, they need to provide more than advertising placements. Mike sums it up best:
“We have to provide value. As a pure advertising play, we will lose to Google or just lose to a short attention span. This is [about] doing business with Spotlight. Not doing an ad.”
In this case, value-add services complete the story for many advertisers. The sponsored content, the video, and the head shots all add up to an easy sell for growing businesses that need more than just an ad.