Does Real-Time Bidding Threaten Salespeople? - Charlie Warner
eMarketer estimated this week that buying display ads through real-time bidding (RTB) platforms will account for 13 percent of online display spending in 2012, rising to 25 percent in 2015.
Does the increased use of RTB mean that more and more salespeople will be disintermediated by ad exchanges and trading desks and put out of work?
No.
Silicon Alley Insider's November 15th Chart of the Day showed that "Google Rakes In More Ad Dollars Than U.S. Print Media" - yes, more than all magazines and newspapers combined. But over the last several years Google has added scads of salespeople as it has grown, even though the final sale of keywords is handled by AdWords, Google's online RTB platform.
What has happened, though, as the result of automated ad-buying platforms and exchanges is that the role of digital salespeople has changed dramatically. Their role has morphed from "closer" to "educator." Traditional advertisers and agencies are often lost when they try to buy new mediums such as search and social media. They don't need closing; they need educating. They need help in buying these dramatically different and radically new mediums.
Advertisers also need insights into how search, social media, and mobile advertising can save them money, increase their advertising ROI, and help them sell a lot more stuff, as brilliantly described in the bellwether book, The Challenger Sale. Exchanges and RTB platforms can't educate clients, can't give insights, and can't build trusting relationships. You can't get a hug from a computer … yet.
In David Mamet's play and movie, Glengarry Glen Ross, the chilling speech by Blake (brilliantly played by Alex Baldwin in the movie) in which he nastily exhorts the real estate salespeople (all men) to "ABC -- Always Be Closing" is a classic view of the old-fashioned perception of salespeople in a bygone era before Google, Facebook, and Twitter. Salesmen were closers then. Salespeople are educators today, or they'd better be unless they want to be replaced by RTB platforms.
RTB platforms drive prices down; they're only concerned about price, not value. Good sales educators drive value up by gaining client trust and giving insights and strategies on how to invest in digital advertising and marketing.
So, as digital advertising investment for the world's largest media companies (38 percent) approaches television ad investment (42 percent), according to Silicon Alley Insider's October 2nd Chart of the Day, it won't be but a few more years until online becomes the world's number-one ad medium. And this top rank will not be because of RTB platforms, which will do an increased percentage of the grunt work of buying, but will be because of flesh-and-blood salespeople building trust and educating clients how to invest in digital advertising and, by the way, how to use the RTB platforms.
Until he retired in 2002, Charlie Warner was Vice President of AOL's Interactive Marketing division. Before joining AOL, he was the Goldenson Endowed Professor at the Missouri Journalism School where he taught media management and sales, and he created and ran the annual Management Seminar for News Executives. Charlie can be contacted at charleshwarner@gmail.com.
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