If you are currently outsourcing ad sales, the idea of bringing the function inhouse has probably crossed your mind. We’re often asked our advice on the subject. Assuming you are interested in maximizing the amount of revenue you realize from your ad sales program, determining which approach is likely to net you more – continuing to outsource vs. bringing the function in-house – is going to be a key factor in your decision.
All else being equal, I tend to lean toward bringing the operation in-house. But all things are rarely equal. Your current provider’s compensation (your “cost of sales”) is most likely performance-based: the more they sell, the more they earn. In this scenario, you have limited fixed costs (and possibly none). However, once you make the decision to bring sales in-house, you will be assuming considerable fixed costs. Even if you find some person(s) willing to work on a commission-only basis (and even if you do, you’ll probably have to provide a guaranteed minimum or at least a monthly draw – likely non-recoverable until they hit their stride), you need to factor in the cost of benefits.
A few other things to consider. . .
How many people does your current provider have working your account? If you bring sales in-house, how many people will it take for you to match your current provider’s performance?
If your in-house sales team were to merely match the gross sales achieved by your current provider, would you net more or less after factoring in all your costs?
How much experience does your current provider have selling advertising into your market? Can you find people with equal or greater experience? (Chances are the contract with your current provider prohibits you from hiring any of their employees. The people you are able to hire, regardless of their experience, will take time to develop the relationships that your current provider’s people already have – not a minor consideration, by the way.)
Do you have someone on staff now who is capable of managing an in-house ad sales team? If not, you may need to factor that additional cost into your budget.
Whether or not to bring ad sales inhouse is a decision only you can make. But how you answer these questions will likely be revealing.