Does Your Media Company Have Sales and Finance Synergies? Why This Relationship Matters

So where do sales and finance most need to align and share input in local mediaMy personal experience of being in the radio business for more than 30 years amp8211 and working with sales executives and CFOs amp8211 gives me a unique outlook on where these groups need to connect to achieve and sustain revenue successUnderstanding Digital Advertising Revenue StreamsFor most local media companies digital advertising sales is a newer revenue stream Linear spot ads are a mature segment but digital offers new opportunities However these ad units are much different from traditional ones in terms of cost of goods sold COGS commissions operations and seller efforts All these things mean there are more costs associated with selling digital advertisingOften these issues are barriers to profitability so sales and finance need clarity and transparency regarding expenses and how they impact profits Sales should explain why these models wonamp8217t look the same as linear and work together to set goals on what a amp8220goodamp8221 margin is and how it can grow Finance experts are always looking for ways to cut costs and could offer some strategies around operational efficiencyPricing out advertising could also be a group endeavor as you analyze the COGS and define the necessary profit for digital to be a successSeller Commission StructuresAs noted seller commissions for digital are typically different than selling linear spots or OampampO owned and operated inventory There are many models to apply including paying on net or on gross There may be further nuances to motivate sellers such as paying varied percentages per tactic or doing so in terms of new business and renewals Commission structures will evolve as well due to internal and external factorsThis is an important topic that sales and finance should discuss Sales executives would bring their incentive perspective and desire to retain skilled sellers Finance professionals would look at it more objectively advising how models can impact overall profitsWhat both groups have in common around goals for this is to retain high performers since turnover creates expenses that the entire company must bearSales and Finance Budget Conversations Your annual sales budget includes many categories amp8211 personnel technology and promotions During budgeting every group creates its wish list knowing that the pool of money isnamp8217t large enough for everyone Whatamp8217s unique about sales is that your costs actually generate revenue Thatamp8217s a good thing to always keep in mind and remind finance of during these negotiations Finance also loves anything that reduces waste and saves moneyFor example sellers may use several platforms to propose order and execute digital advertising They may also be users of traffic software These solutions have costs associated with them but thereamp8217s often an opportunity to consolidate and integrate which could save you actual dollars as well as time and resources Finance would appreciate the savings and the potential to reallocate those dollars to other revenuegenerating activitiesStrategic Planning for Sales and FinanceAnother area where sales and finance should meet and collaborate is around longterm strategic planning What will your sales team look like in the next five years What will they need to be successful How will sales modernize workflows to stay competitive and effectiveThese are big questions that should be part of salesfinance discussions about the future Sales needs investment to improve and optimize Finance wants to understand how these will yield revenue A strategic sales plan should align with your organizationamp8217s overall growth objectives If not thereamp8217s a huge disconnect that means alignment is happeningThese conversations will constantly evolve as the industry does Annual checkins are necessary and Iamp8217d encourage them to be even more regular than thatSales and Finance Should Be Partners Not AdversariesThere are a lot of cliches in the business world that say sales and finance are always in opposition It may be great fodder for memes and movies but itamp8217s not the reality These groups are two pieces of a bigger puzzle and you canamp8217t achieve sustainable reliable revenue without bothOther times thereamp8217s just no regular interaction between the groups which creates strategy silos and gaps Your organization will experience the best outcomes when thereamp8217s a consistent connection between the two If thatamp8217s not where you are today then start laying the groundwork for collaboration by defining specific times to meet sharing relevant information and working on mutual goalsThereamp8217s much more to say about the power of sales and finance working as a team Weamp8217ll share more insights and tips in our upcoming MFM webinar How Finance and Sales Can Work Together to Grow and Protect Revenue scheduled for September 24 We hope to see you thereThis article was written by Todd Kalman Senior Vice President of Sales at Marketron He oversees revenue development and sales partnering with radio stations to help them grow with Marketronamp8217s technologyPosted at MediaVillage through the Thought Leadership selfpublishing platformClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillageorgMyersBizNet

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