NEW-MEDIA COMPANIES SCRAMBLE FOR SALESPEOPLE: SHORT SUPPLY OF EXPERIENCED TALENT HURTS SMALL PLAYERS

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New-media entrepreneur Seth Tapper late last year started looking for a person to sell ads for PlaySite, an Internet gaming site he'd developed. After a month, he ended up recruiting a relatively inexperienced salesman from a local paper. But the day the new hire was supposed to start, he called to say he'd taken another offer-with Softbank Interactive, the country's largest interactive ad sales agency.

"Softbank gave him more cash up front," said Mr. Tapper, now president of Internet Games Corp.

IN BIG DEMAND

Ad salespeople are Silicon Alley's latest hot commodity. Under pressure from investors, companies are desperate for experienced sales talent who can generate revenue. They're luring them from other industries, poaching them from competitors and paying salaries bigger than they can afford.

"The development stage is over and the clock is ticking," said Gregg Grossman, a new-media recruiter with Pathway Executive Search. "There's a lot of pressure to hire people who can sell."

Traditional media companies and well-backed startups like DoubleClick and iVillage can afford the necessary talent. But many smaller players are being priced out of the market.

"Companies in the Internet industry are in a race against time because we all know there's going to be a shakeout," said Nova Spivack, exec VP-strategy at EarthWeb, a Java developer.

LOTS OF OPENINGS

The demand is huge. DoubleClick has 14 openings for salespeople. EarthWeb has 10, including three senior-level jobs that have been open for five months. Yoyodyne, the game developer and direct marketer, said it will hire anyone who meets its standards, even without a specific opening, just to lock in a skilled pitchman.

"The more bodies you can put on the street, the more likely you are to be in the right place at the right time," said Jerry Shereshevsky, Yoyodyne's director of marketing.

Internet-savvy salespeople are the most sought after. For a while last spring, Pathway's Mr. Grossman stopped taking new assignments because of the scarcity of experienced candidates.

Adding fuel to the frenzy is the pervasive confusion over whom to hire. Some companies won't talk to anyone who hasn't sold online ads before, which is leading to extensive poaching. Others said they'll consider anyone with a track record in ad sales, even though they have to pay a high premium to match the salaries offered in mainstream media.

DON'T WANT SETBACKS

"If they're close to getting $150,000, they don't want to accept a setback for changing fields," said David Simon, VP-director of sales for Yoyodyne.

Mr. Simon himself came out of a traditional media job, where he sold music for TV commercials.

Top online reps can't yet command the $175,000 to $200,000 their peers in broadcast sales get, but the bar is rising quickly. The going rate for a new-media sales director is $150,000, plus commissions and an equity sweetener.

To keep pace, Winstar Interactive CEO Adrian Skinner has already had to rework her budget this year.

"I've had to ratchet up 20% to 30% more than I had budgeted to get quality people in the door," Ms. Skinner said.

Even with rising salaries, it can be a hard sell, especially for salespeople used to the hefty commissions that traditional media can generate. The Internet ad market last year was $300 million, although analysts estimate it will rise to $5 billion in the next two years. But that's still a fraction of the $175 billion domestic ad market.

And the available ad space on the Web far exceeds advertiser demand.

AVOIDING RISKS

"Many salespeople are risk averse," said Alan Wragg, president of advertising for Mining Co., an online guide to Web sites. "Until they see the bloom on the rose, there are many who would prefer to stay where they are."

Besides, a marriage between traditional and new media doesn't always last. Eighteen months ago, iVillage heralded the arrival of Louise Coolick-Homburger from Family Life to head up its sponsorship sales program. Within a year, Ms. Coolick-Homburger was back in print as ad director of Conde Nast Publications' Mademoiselle.

Content companies-both large and small-are all feeling the pressure.

"Our sales might be up 500%, but could they be up 700%?" asked Robert Levitan, senior VP-market development for iVillage.

CAUGHT IN THE SQUEEZE

Typically, however, it's the small companies that are getting squeezed the most.

When Internet Games Corp.'s Mr. Tapper lost his ad sales hire, he signed on with an online ad network to pitch his site to advertisers. But in July, he ended up selling PlaySite because he couldn't put together the budget for marketing and promotion, including salespeople, to compete with larger ventures.

Mr. Tapper has a new site in the works that he said won't depend on ads for revenue.

"The idea is to generate traffic and revenue in ways other than ads," he said. "Just getting an ad salesperson to be able to cover their own salary is a big risk."

Ms. Messina is a reporter for Crain's New York Business.

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