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FTI Journal • 1FTI Journal • 1
February 2017
Death of the Travelling Salesman?
A decade ago, selling digital advertising was an anachronistic affair. A salesperson would enter a room and tout a network of websites,
often highlighting certain publishers and their presumed audience. The parties would negotiate a custom insertion order and
then pass it on to ad ops for trafficking. Despite the Internet’s established self-serve efficiency, ad sales remained high-touch and
hands-on.
Fast forward to today and witness how much digital ad sales have changed.
“Programmatic” ads — whereby automated platforms match ad buyers with
ad sellers in real-time — currently serve over 70% of the $65B U.S. digital
media market (including search, social, display, video). Programmatic now
accounts for roughly 60% of display and 40% of digital video sales. In search
and social, the proportion is closer to 100%1
. Even programmatic ad spending
outside search (the early pioneer) has boomed; from almost zero in 2010 it
has grown to $22B, with forecasts predicting continued growth to 2020.
How much of the total U.S. advertising market will ultimately be sold
programmatically? We’ll gain greater insight over the next few years as
programmatic ad sales continue to grow share due to increased adoption
within digital media, particularly as traffic migrates to mobile platforms.
Longer term, however, such sales are poised to absorb a significant portion of the total $200B+ U.S. ad market because of the
continued share shift into digital media, and eventually, penetration into the $70B+ television, radio, and outdoor markets.2
Based on
The growth of programmatic ad sales has the potential to displace, but
not obliterate, sales organizations. Adapting to the new reality is the key
to thriving.
By Daniel Punt
John Cartoux
2 • FTI Journal
DEATH OF THE TRAVELLING SALESMAN?
When applied to digital ad campaigns today, data targeting
typically produces a 50–100% uplift in CPM. Furthermore,
recent FTI research indicates that over 80% of digital
advertisers now demand data-driven audience targeting while
less than 50% demand specific brand, placement, or content.
Preferences for data imply a shift in the relative value of data
versus more traditional media assets such as content and
brand. Data-driven ad sales also require salespeople who can
develop and interpret analytics (a “science”) in addition to
communicating brand and content value (an “art”).
Programmatic ad sales also provide new tools to the sales
team. One example is the private marketplace, which allows
these trends, we predict that more than 50% of the entire U.S.
ad market will be sold programmatically by 2024.
How will this dramatic shift impact sales organizations? While
we do not foresee the end of hands-on, human selling, we do
expect that the size of sales teams will decline, and that selling
skills will evolve. Rather than generating revenue merely on
volume metrics such as sellout and CPM, the sales force of the
future will build revenue based on solution-based sales that
deliver targeted audiences based on evolving ad products, in
many cases across a portfolio of media that includes both
traditional and digital. This will require live sales people to
define and position premium inventory, to engineer integrated
media bundles, to structure upfront commitments and to
customize on-demand options.
According to FTI’s advertising forecast, programmatic ad sales will
account for over half of total U.S. advertising sales by 2024 with
approximately 85% of digital ad dollars sold programmatically.
Growth will be driven by video, which will comprise “most of
what people consume online… within five years,” as Mark
Zuckerberg commented in his Q1 2016 earnings call.
The Impact on the Sales Organization
Programmatic ad sales will certainly change the ad sales
organization — but not obliterate it. While the organization will
no longer require the same number of bodies, it will still need
to create and grow relationships with ad accounts using real,
live salespeople. The sales organization will still need to define
ad products, including premium offerings, and communicate
benefits to buyers. It will also need to support ad buyers in
navigating complex options and in using self-serve tools (as well
as prioritizing how such tools evolve).
A prime example of change in the selling process is how sales
teams define premium ad inventory. The term premium implies
differentiation and scarcity. Traditionally, when creating such
inventory, media companies have considered three tactics:
1) brand environment, 2) placement (for example, ads run in
primetime), and 3) content association (for example, ads run
during the Super Bowl). Now, however, programmatic has
introduced a fourth tactic: data targeting.
Principles of the Future Sales Organization
1.  Client-centricity
•	Treating advertisers as “clients” rather than simply
“buyers.”
•	Understanding and aligning client marketing goals with
specific ad products.
•	Building trust by promoting transparency.
•	Investing in CRM tools that track client needs.
•	Educating clients at agencies and small businesses,
possibly even embedding technical resources at larger
agencies.
2. Solutions-based sales
•	Developing solutions experts who understand
marketing and data analytics.
•	Constructing distinctive premium offerings that
motivate sales commitments.
•	Creating compelling business cases and success
metrics for advertising solutions vis-à-vis major digital
competitors such as Google and Facebook.
•	Investing in data assets, such as via a data
management platform (DMPs).
3. Product roadmaps
•	Treating ad products as the “tools” used to serve clients.
•	Developing product teams who can manage roadmap
and lifecycle.
•	Prioritizing ad products to address client needs – but
also scalability.
•	Addressing “self-service”, including integration with
priority media planning and buying tools.
DEATH OF THE TRAVELLING SALESMAN?
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an
increasingly complex legal, regulatory and economic environment. FTI Consulting professionals, who are located in all major business
centres throughout the world, work closely with clients to anticipate, illuminate and overcome complex business challenges in areas
such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management and restructuring.
www.fticonsulting.com	 ©2017 FTI Consulting, Inc. All rights reserved. 001519
sales teams to invite ad accounts to purchase ad inventory
programmatically within an exclusive environment, rather
than via a public ad exchange. Compared to traditional sales,
a private marketplace gives advertisers the flexibility to adapt
as marketing schedules and budgets change. It also creates
opportunities for the sales team to package in new ways. For
instance, the salesperson may pre-negotiate price with a
buyer in exchange for an upfront commitment to buy premium
inventory (however defined) and/or a total volume commitment
(which the buyer may deploy flexibly). These tools require
salespeople fluent in the available options and their benefits.
With new opportunities and tools also come new burdens.
Advertisers now expect customized solutions, which increases
the time and complexity of the sale as well as the reporting
of the results. The sheer breadth of options can be daunting.
For example, private marketplaces can enable volume
commitments versus unrestricted access; guaranteed price
versus real-time bidding; supplier consortia versus single-
supplier environments. The sales team risks losing scalability
in a sea of custom deals. Custom audience targeting also
requires new inventory management and trafficking systems,
which often report differently and do not integrate with legacy
systems. Additionally, sales teams may struggle to maintain
campaign size once they give ad buyers a taste of targeting and
efficiency. These challenges will require salespeople who can
understand and help evolve ad products.
Over time, we foresee a transition to smaller, more highly-
skilled, solutions-based sales organizations. While the transition
will likely incur short run costs, we believe that in the long term
it will result in efficiencies that reduce costs. In particular, we
foresee reductions in the large fleets of salespeople trained
merely to sell volume on traditional reach metrics. We foresee
an array of carefully managed ad products that combine
scalability with some degree of customization. Eventually, we
believe the net impact will be higher sales productivity and
increased span of control within the sales organization.
So where will this leave the traveling salesperson? Alive and well,
with an advanced degree and a metaphorical suitcase packed
with sophisticated tools.
NOTES
1: FTI Programmatic Market Size Model (2016), with data inputs
from IAB, Front Row Advisory, BIA/Kelsey, eMarketer and
others
2: FTI Programmatic Market Size Model (2016)
Contacts:
Daniel Punt
Managing Director
Corporate Finance & Restructuring
FTI Consulting
daniel.punt@fticonsulting.com
John Cartoux
Managing Director
Corporate Finance & Restructuring
FTI Consulting
john.cartoux@fticonsulting.com
For more information and an online version of
this article, visit ftijournal.com.

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Death of the Traveling Salesman?

  • 1. FTI Journal • 1FTI Journal • 1 February 2017 Death of the Travelling Salesman? A decade ago, selling digital advertising was an anachronistic affair. A salesperson would enter a room and tout a network of websites, often highlighting certain publishers and their presumed audience. The parties would negotiate a custom insertion order and then pass it on to ad ops for trafficking. Despite the Internet’s established self-serve efficiency, ad sales remained high-touch and hands-on. Fast forward to today and witness how much digital ad sales have changed. “Programmatic” ads — whereby automated platforms match ad buyers with ad sellers in real-time — currently serve over 70% of the $65B U.S. digital media market (including search, social, display, video). Programmatic now accounts for roughly 60% of display and 40% of digital video sales. In search and social, the proportion is closer to 100%1 . Even programmatic ad spending outside search (the early pioneer) has boomed; from almost zero in 2010 it has grown to $22B, with forecasts predicting continued growth to 2020. How much of the total U.S. advertising market will ultimately be sold programmatically? We’ll gain greater insight over the next few years as programmatic ad sales continue to grow share due to increased adoption within digital media, particularly as traffic migrates to mobile platforms. Longer term, however, such sales are poised to absorb a significant portion of the total $200B+ U.S. ad market because of the continued share shift into digital media, and eventually, penetration into the $70B+ television, radio, and outdoor markets.2 Based on The growth of programmatic ad sales has the potential to displace, but not obliterate, sales organizations. Adapting to the new reality is the key to thriving. By Daniel Punt John Cartoux
  • 2. 2 • FTI Journal DEATH OF THE TRAVELLING SALESMAN? When applied to digital ad campaigns today, data targeting typically produces a 50–100% uplift in CPM. Furthermore, recent FTI research indicates that over 80% of digital advertisers now demand data-driven audience targeting while less than 50% demand specific brand, placement, or content. Preferences for data imply a shift in the relative value of data versus more traditional media assets such as content and brand. Data-driven ad sales also require salespeople who can develop and interpret analytics (a “science”) in addition to communicating brand and content value (an “art”). Programmatic ad sales also provide new tools to the sales team. One example is the private marketplace, which allows these trends, we predict that more than 50% of the entire U.S. ad market will be sold programmatically by 2024. How will this dramatic shift impact sales organizations? While we do not foresee the end of hands-on, human selling, we do expect that the size of sales teams will decline, and that selling skills will evolve. Rather than generating revenue merely on volume metrics such as sellout and CPM, the sales force of the future will build revenue based on solution-based sales that deliver targeted audiences based on evolving ad products, in many cases across a portfolio of media that includes both traditional and digital. This will require live sales people to define and position premium inventory, to engineer integrated media bundles, to structure upfront commitments and to customize on-demand options. According to FTI’s advertising forecast, programmatic ad sales will account for over half of total U.S. advertising sales by 2024 with approximately 85% of digital ad dollars sold programmatically. Growth will be driven by video, which will comprise “most of what people consume online… within five years,” as Mark Zuckerberg commented in his Q1 2016 earnings call. The Impact on the Sales Organization Programmatic ad sales will certainly change the ad sales organization — but not obliterate it. While the organization will no longer require the same number of bodies, it will still need to create and grow relationships with ad accounts using real, live salespeople. The sales organization will still need to define ad products, including premium offerings, and communicate benefits to buyers. It will also need to support ad buyers in navigating complex options and in using self-serve tools (as well as prioritizing how such tools evolve). A prime example of change in the selling process is how sales teams define premium ad inventory. The term premium implies differentiation and scarcity. Traditionally, when creating such inventory, media companies have considered three tactics: 1) brand environment, 2) placement (for example, ads run in primetime), and 3) content association (for example, ads run during the Super Bowl). Now, however, programmatic has introduced a fourth tactic: data targeting. Principles of the Future Sales Organization 1.  Client-centricity • Treating advertisers as “clients” rather than simply “buyers.” • Understanding and aligning client marketing goals with specific ad products. • Building trust by promoting transparency. • Investing in CRM tools that track client needs. • Educating clients at agencies and small businesses, possibly even embedding technical resources at larger agencies. 2. Solutions-based sales • Developing solutions experts who understand marketing and data analytics. • Constructing distinctive premium offerings that motivate sales commitments. • Creating compelling business cases and success metrics for advertising solutions vis-à-vis major digital competitors such as Google and Facebook. • Investing in data assets, such as via a data management platform (DMPs). 3. Product roadmaps • Treating ad products as the “tools” used to serve clients. • Developing product teams who can manage roadmap and lifecycle. • Prioritizing ad products to address client needs – but also scalability. • Addressing “self-service”, including integration with priority media planning and buying tools.
  • 3. DEATH OF THE TRAVELLING SALESMAN? About FTI Consulting FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. FTI Consulting professionals, who are located in all major business centres throughout the world, work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management and restructuring. www.fticonsulting.com ©2017 FTI Consulting, Inc. All rights reserved. 001519 sales teams to invite ad accounts to purchase ad inventory programmatically within an exclusive environment, rather than via a public ad exchange. Compared to traditional sales, a private marketplace gives advertisers the flexibility to adapt as marketing schedules and budgets change. It also creates opportunities for the sales team to package in new ways. For instance, the salesperson may pre-negotiate price with a buyer in exchange for an upfront commitment to buy premium inventory (however defined) and/or a total volume commitment (which the buyer may deploy flexibly). These tools require salespeople fluent in the available options and their benefits. With new opportunities and tools also come new burdens. Advertisers now expect customized solutions, which increases the time and complexity of the sale as well as the reporting of the results. The sheer breadth of options can be daunting. For example, private marketplaces can enable volume commitments versus unrestricted access; guaranteed price versus real-time bidding; supplier consortia versus single- supplier environments. The sales team risks losing scalability in a sea of custom deals. Custom audience targeting also requires new inventory management and trafficking systems, which often report differently and do not integrate with legacy systems. Additionally, sales teams may struggle to maintain campaign size once they give ad buyers a taste of targeting and efficiency. These challenges will require salespeople who can understand and help evolve ad products. Over time, we foresee a transition to smaller, more highly- skilled, solutions-based sales organizations. While the transition will likely incur short run costs, we believe that in the long term it will result in efficiencies that reduce costs. In particular, we foresee reductions in the large fleets of salespeople trained merely to sell volume on traditional reach metrics. We foresee an array of carefully managed ad products that combine scalability with some degree of customization. Eventually, we believe the net impact will be higher sales productivity and increased span of control within the sales organization. So where will this leave the traveling salesperson? Alive and well, with an advanced degree and a metaphorical suitcase packed with sophisticated tools. NOTES 1: FTI Programmatic Market Size Model (2016), with data inputs from IAB, Front Row Advisory, BIA/Kelsey, eMarketer and others 2: FTI Programmatic Market Size Model (2016) Contacts: Daniel Punt Managing Director Corporate Finance & Restructuring FTI Consulting daniel.punt@fticonsulting.com John Cartoux Managing Director Corporate Finance & Restructuring FTI Consulting john.cartoux@fticonsulting.com For more information and an online version of this article, visit ftijournal.com.