Creative Resources Group helps media companies to create sustained revenue growth. Sally Beamer is Managing Partner and Gerry Tabío is Founder and CEO. This is the first in a three part series in which Tabio shares some tips on sustainable sales growth.
Gerry, tell us about your background and what you do.
Both Sally and I got our start in radio. Sally came up through sales and I came up through promotions and marketing. The Creative Resources Group was born in 1990 and over the last 35 years we have been very fortunate to work with a wide variety of media companies all over the world. From the beginning, we set out to specialize in working exclusively with media companies.
Some of the projects we have worked on have been very large and long-term, like helping companies build entire corporate universities. Others have been smaller and more focused, like helping a company turn around a single biggest unit.
Today, we get hired to help companies create sustained revenue growth. So, a few years ago, we set out to answer the simple question, where does growth really come from?
We conducted a series of statistical studies to understand the factors that explain why some companies grow while others don’t. At a macro level, we examined large companies with multiple business regions, markets and offices. At a micro level, we crunched the revenue numbers of hundreds of business units in all sectors of media.
We were especially curious to understand how different client segments impacted the business’ ability to grow over the prior year.
How did you get involved in out of home advertising?
Our first foray into out of home was when we got a call from a former client who had just taken over sales at Big Outdoor in Dallas. Not only were we very excited to work with this particular manager again, but, frankly, we were eager to take a look at the data.
We were very curious about whether the out of home sector of the advertising business would be very different from the revenue patterns we had already seen in other sectors like radio, television, cable, etc.
What we learned back then – which we have revalidated many times since – is that the same factors are at play within out of home companies as the rest of the advertising landscape.
For one thing, out of home companies generate a huge amount of revenue from a relatively short list of clients.
We have also learned that the top 25% of those clients provide roughly 80% of the total annual revenue (in media, the 80/20 rule is actually 80/25).
Now, those large clients have an ongoing need to advertise. Every year, they have to jump into the market to either support a particular brand or engage in short-term activation campaigns. So, the money they spent last year will probably be spent again this year. But there is a hitch.
While those big clients have to advertise, they don’t have to do it with any one company. The Internet has brought many wonderful things to our lives. Unfortunately, one of them is that it has eliminated the cost of switching. A client or an advertising agency can move $1 Million from one medium to another or from one company to another with a few clicks.
So, it becomes even more important for an out of home company to deeply understand the factors that determine its ability to grow from year to year
To learn more visit creativeresourcesgroup.com or email sallybeamer@creativeresourcesgroup.com and gerrytabio@creativeresourcesgroup.com.
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