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The average North American publisher spends up to 1600 man hours per month responding to Requests For Proposals (RFPs), costing them 18% of sales (excluding sales commissions) to handle what often times are standard display orders. Publishers attribute as much as 40 percent of their advertising revenue to business that results from responding to RFPs from ad buyers, but no single process takes as much time with as uncertain a result.
How costly in terms of time and effort that the pre-planning or RFP process is – given everything it takes to bring an ad campaign to life online – may surprise many publishers. We say that because, of the 317 ad-supported digital publishers who began a Digiday / Adslot State of the Industry Survey last month, only 18 percent of them would even hazard a guess about what their direct sales operations cost as a percent of revenues.
Even so, respondents displayed a startling amount of consensus about the activities they say sap more time and energy than they’re worth. Cited as the most painful and possibly most wasteful revenue-driving activities were time spent in the RFP process, optimizing campaigns to meet possibly unrealistic expectations, and a need for self-service to streamline operations, in that order.
Actual time spent in answering RFPs drives home the expense of this activity. Of the 77 percent of publishers in our survey who say they even respond to transactional RFPs, the per person time spent on the business typically consists of:
Even with this much attention, not all efforts result in an ad buy. Some 65 percent of RFP responses miss the buy outright. And, of the 35 percent of publishers tapped for a “win,” another 24 percent of campaigns are lost after the campaign begins due to poor performance.
The following infographic drives home what it means in terms of time spent and revenue gained for an average publisher in our survey to address RFPs. If each publisher answers 23 RFPs per month, wins an average of 8, and then loses 2 even after a campaign is launched due to poor performance, there could be more than 1600 personnel hours tied up each and every month.
More detail on sales costs and strategies to eliminate bottlenecks in the sales process may be found in the full white paper, and you can watch what Raj Chauhan, Adslot North American President, had to say about survey results at Digiday’s Programmatic Advertising Breakfast last week in this video.
Chief Marketing Officer