Despite the full-scale counterattack currently being waged by the public and private sectors, the economy continues to struggle. Advertising in particular is down, making it especially difficult for those of us in the media community.
Here are four tips to make help make it through:
1. Ask for upfront or 15-day payment from clients in exchange for a percentage reduction on invoices. Communication is the key. Start with your direct advertisers and give them the option first. There has never been a more important time to advertise, and rewarding those who pay quickly will only garner market share in the coming years. A good alternative to a discount for multiple-term clients is to add value at the end of a contract for prompt payment throughout.
2. Ask your vendors for discounts on invoices paid in advance or on 15-day terms. Take your own advice! Offering quick payment is a fair tradeoff for a discount, and your loyal vendors will gladly oblige. This may be tough if your own clients are paying on increasingly longer terms—but since you have to pay a bill eventually, you might as well get a discount for doing so in a timely manner.
3. Hire skilled interns, pay them hourly and keep their hours below the maximum allowed for full-time benefits. Craigslist has low posting fees and is a good place to recruit interns! Interns are excited, energetic and more eager to learn then temps who typically look at your company as a stepping stone. At least one of the interns will likely turn into a star who can be hired full time when the economy strengthens.
4. Maintain rate integrity, and do not fight costly price wars. The question is, would you rather be 75% sold at 100% rate or 90% sold at 70% rate? If your competition starts dropping rates, there are three effective counterattacks. One, explain to your customer that buying a product below market rate (or in some cases below cost) will surely lead to drastic future rate hikes and perhaps a loss in service levels if the numbers of vendors decrease. Two, send a message to your competitor that entering a war with you is a bad decision that will lead to either a zero-sum outcome or collateral price damage. One tactic, is to offer the competitor’s client a deal below that competitor’s floor price, thus forcing the competitor to either match the rate or lose the client altogether. Three, add value. When a potential client is looking at two, three or five bids, you can make price the least significant factor by creating products that never before existed.
Finally, remember that while these times are complicated, there will be a turnaround! A positive attitude, integrity and a strong work ethic goes a long way—and it all starts in the corner office. Now is a crucial time for small-to-midsized media and marketing services companies to be proactive, as the decisions made today will pave the way for future success. By using the tactics above, I believe we’ll all find the worst of the advertising and marketing downturn to be quickly behind us.
John Amato is the co-founder and president of Show Media, a diversified taxi, billboard and event-based advertising company with operations in Los Angeles, New York City and Las Vegas. He can be reached at [email protected].
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