Sue Decker's ascension last week to run Yahoo's ad-sales operation is the latest sign of a major shift in the way media companies are reacting to fierce market pressures. With traditional companies out to prove they're still viable and able to thrive against new competitors, and digital companies out to prove they can "monetize" for the long haul, ad sales is suddenly being deemed too important to leave to the admen.
Yahoo's ad operation accounts for around 87% of the company's $5.26 billion 2005 revenue, and the company's reorganization last week made it clear its future lies not in the hands of a born and bred ad-sales person but a finance whiz who cut her teeth on Wall Street. Ms. Decker, Yahoo's chief financial officer -- and potential CEO-in-training -- takes charge of Yahoo's advertiser publisher group, assuming many of the responsibilities that formerly fell to Dan Rosensweig, a longtime media-sales guy who spent much of the '90s at Ziff-Davis Group.
Seasoned vets need not apply
Ms. Decker's posting to the ad unit is not unusual today. The top sales job doesn't necessarily go to the person who's been "in the business" longest and has the biggest Rolodex. Consider the recent appointment of an executive out of GE's Commercial Finance division, Michael Pilot, as NBC Universal's sales chief, replacing seasoned TV-advertising salesman Keith Turner. Or Viacom's ousting of Tom Freston -- a media magician who built MTV Networks -- for Philippe Dauman, a lawyer by training but more than anything a smart M&A guy who might have been a behind-the-scenes player up until now but will likely be more comfortable with talking finance than his predecessor. Even research giant VNU chose an industry outsider and Six Sigma practitioner as its new CEO rather than going for an ad- or media-industry veteran.
At a company like Yahoo -- which is about as close to a pure-play advertising company as any -- the person helming ad sales is essentially the person the Street is looking to. And with the increasing pressure on public companies to prove value and growth and deliver results quarter after quarter, having someone comfortable not only with numbers but also with investors makes sense.
"I have no doubt there's a trend," said Michael Speck, leader of the media practice at executive recruiter Heidrick & Struggles. "On the ad-sales side, there's a perspective -- whether it's fair or unfair -- that there's an old boys' network that's been running that for a long time. By having someone with strong financial roots in those kind of roles, companies can really drill down and help assess the value and sell the value to clients." And, of course, to the Street.
One of the dangers
But there is a danger to having a number cruncher lead ad sales: "There's a risk around [cannibalizing] the relationship aspect in this business," said Mr. Speck.
One major media buyer, however, sees a definite advantage to having these types of executives in these roles. "From an advertiser's perspective, this might be a really positive move because, frankly, we want a different skill set in those companies so they become more accountable to the advertiser," said Starcom CEO John Muszynski, a self-described numbers guy.
He did voice one concern: The media seller must also be a marketer, as ad buys are moving away from dollars-and-cents deals to include things such as content plays and CRM programs.
"I believe what's really needed is more marketing minds that also understand the finance piece," he said. "It requires a new type of skill set, and I don't think it necessarily exists."
As the media companies move into a period where it's all about who made the best deal for an old-media or emerging-media matchup, the kinds of executives they need are similar to those who now sit atop the advertising holding companies.
Guess who runs the ad companies?
Ad-agency holding chiefs are savvy number crunchers with strong financial backgrounds -- WPP's Martin Sorrell, an economics scholar who ran the finance division for Saatchi & Saatchi, and Omnicom's John Wren, a former accountant -- who were able to see the money-making possibilities in rolling up several shops run by big-name creatives under one umbrella with media-buying operations, direct marketing, public relations and events companies. Media companies, similarly, are now looking for a combination of assets that will allow them to thrive 20 years from now. That takes executives skilled in long-range planning and the drafting of efficient business plans.
Ms. Decker is a veteran equity-research analyst who spent a dozen years covering media and advertising stocks. Before she came to Yahoo in 2000, she was at Donaldson, Lufkin & Jenrette for 14 years, where she most recently headed up global equity research. She sits on the board at Intel, and at Yahoo her duties are more than typical CFO fare -- she heads up the marketplaces division and negotiated the recent deal between Yahoo and 160 local newspapers.
At Yahoo, Ms. Decker and Mr. Rosensweig were definitely rivals, according to several people familiar with the company's climate. The two were both gunning for the CEO job, although Terry Semel has not indicated when he plans to retire.