Case Study: How Group Nine has reoriented its ad sales approach

By Tim Peterson

Plenty of publishers have had to tweak their ad sales approaches since the spring of 2020. For Group Nine Media, however, the ad sales adjustments predated the pandemic — stemming from its acquisition of PopSugar in fall 2019 — and have come into play as advertiser activity has ebbed and flowed over the past year and a half.

“We were lucky enough to merge two companies right before the pandemic hit,” said Group Nine chief revenue officer Geoff Schiller during the Digiday Publishing Summit in September.

Schiller was speaking tongue-in-cheek, as the shift to remote work has continued to prevent some new co-workers from meeting in person. But he did explain how the Group Nine-PopSugar tie-up resulted in the media company shifting its ad sales structure and strategy and how those changes enabled the company to adapt to the pandemic’s impact on the ad market.

Restructuring sales

After Group Nine Media acquired PopSugar, the company shifted the structure of its ad sales team. Previously ad sellers had been dedicated to specific agencies, but now they were oriented around advertisers’ industry verticals, such as travel and retail.

The vertically-oriented sales structure has positioned Group Nine to more easily sell ads across its five properties. Animal-centric The Dodo may naturally appeal to pet-related brands, and lifestyle and travel outlet Thrillist may cater to advertisers in the food, drink and travel categories. However, Group Nine didn’t want to box its inventory in with only those advertisers. “You also want to have the power of the portfolio,” Schiller said.

Prioritizing profits

Restructuring its sales team was not the only major change Group Nine instituted after the acquisition. The company also adopted the sales incentive structure that PopSugar had implemented and that Schiller described as “a margin-based quota.” In short, sellers are encouraged to strike the most profitable deals.

“We sort of incentivize to sell higher margin products, then have middle margin and then lower margin,” said Schiller, who shared examples of the three tiers.

Lower margin: A 10-part documentary series that requires travel to Antarctica
Middle margin: A custom content deal that involves some production effort but not on the level of the documentary series
High margin: A custom video or written article that requires low to minimal production effort

For each tier, a seller receives a different level of credit. “They get 100% credit against the high margin, 75% credit against the mid and then 50% against the low. So that naturally drives them to want to sell our higher margin products,” Schiller said.

Findings

Group Nine has largely seen its shift to a vertically-oriented structure and margin-based incentives help the company to steer its advertising business through the pandemic and expand its relationships with advertisers.

Case in point: Target had been a longtime advertiser with PopSugar prior to becoming part of Group Nine. This year Group Nine extended that work to The Dodo for a deal that also included “Sesame Street” and had The Dodo producing a video sponsored …read more

Source:: Digiday