Will Others Follow Google's Sales Lead? - Charlie Warner

In a recent video by Jack Myers, Google ad sales won top honors in a Jack Myers annual survey of the highest performing media sales groups for quality of sales organization and sales support.

Top media sales organization. Way to go Google! But wait a minute; does Google really have a sales organization?

The function of traditional media sales organizations has been to maximize revenue, close deals, and process orders. However, Google salespeople do none of these functions, which are all executed in an online auction by a sophisticated algorithm. Google salespeople are educators; they are evangelists who sell the concept and benefits of display, video, and, mostly, search advertising.

I believe it is because the Google salespeople are educators and evangelists and not deal closers that they have the top reputation among agencies and advertisers. The Google salespeople are trusted partners who help buyers understand and effectively use search and other Google products. They are not commissioned, make- budget-or-die hustlers.

The Google salespeople are not paid on a commission basis, as many media salespeople are, and are not managed by traditional command-and-control sales management hierarchies. Google salespeople work in pods – autonomous, self-managed units that are assigned from one to as many as 30 or 40 accounts, and are paid based on making goals, some of which are quantitative, some of which are qualitative (non-numeric), and some of which have to do with overall Google goals. For example, CEO Larry Page recently set a sales goal that is tied to the overall increase in Google's social media usage.

Traditional, old-line media management is probably saying, "What does increased social media usage have to do with getting an order? And how does sales management know if the salespeople in the pods are making enough calls? It's crazy!"

Yes, crazy according to old-fashioned thinking. But Google's stock closed over $600 a share on Thursday, October 27. It's market cap is just over $194 billion, almost three times the market cap of the largest traditional media company, the Walt Disney Co.; Google's profit margin is 26.7%, more than twice as high as any other large media company; Google's revenue growth for the third quarter of this year was 33% over the previous year, over twice as high as any large media company but Comcast, which bought NBC Universal and thus upped revenues by 50%; and Google's gross profit was $18.9 billion last year, more than three times that of the largest media company, Walt Disney Co.

On October 13, Google CEO Larry Page announced third quarter results  -- revenues of almost $10 billion, up 33%, at which rate by the end of year it should surpass Disney as the largest media company in revenue. Old-fashioned, cliff-dwelling media companies should be so crazy. But, will they follow Google's lead and adopt the new type of selling, compensating, and managing that have made Google the top sales organization according to the Jack Myers survey?

Not by the hair on your chinny-chin-chin. The old media companies think their salespeople are revenue maximizers and closers, not educators and evangelists, and they are not going to change.

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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