The Sales House – Bulgaria’s fast-rising independent ad seller
Launched three years ago, The Sales House currently represents the ad sales of major players like Discovery, WarnerMedia and ViacomCBS in Bulgaria and reaches up to 8% share on the local market. The ad seller was created by a team of former employees of bTV Media Group’s sales team.
Yako Molhov asked Co-Owner and MD Vessela Dimova about the challenges of launching an independent sales house in a market dominated by a couple of giants, the impact of the pandemic on the TV and advertising markets as well as plans for future growth, including outside Bulgaria.
The Sales House started operating in January 2018. What were the main dangers and opportunities in setting up an independent sales agency two years ago?
The idea of a sales house in Bulgaria was not new or extravagant, however quite brave. Companies like ours operate on many markets, but most of them had been established at the dawn of the cable distribution, after the international channels started looking for ways of diversifying revenue streams. These companies had the luck of the first settlers – they obtained the contracts with their partners, just because they were the first to offer the service of selling their ad time. On top of that, some of these sales houses were not fully independent but supported by a strong mother company.
In our case, we were not only 100% independent and unsupported, but we had cast our eyes on the already operating portfolios of international channels of the biggest media groups on the market. In other words, we appeared on an already established market and needed to fight for our partners with the only weapons we had - our impeccable professional history and our persuasiveness. We have been setting the standards for the highest level of service on our market for more than 15 years as part of bTV. We had all the knowledge, innovation, and integration on the market to make our partners successful and we only had to convince them of that!
On a more macro-level, the buy-side in the market needed a strong third player to balance the sell-side duopoly and bring agility and innovation to the industry. The Bulgarian market had been operating under a duopoly model on the sell- side for years, which created pressure on buyers. Agencies and clients acutely needed a strong, agile, and trustworthy third seller, that could counter the market-setting power of the duopoly.
Yet, there was no independent third player on the market, nor there was sufficient investment power or business acumen to create a third strong local TV station from scratch. We believed the thematic channels collectively could form that third important player on the sales side. We had identified a strong potential portfolio of thematic channels and started negotiations with each one of them. Detached from the unbalanced portfolio of the main groups, each channel would be strengthened by becoming a part of a bundle of high-quality peers, maintaining the identity and importance of their own channel brand, while forming a unique bouquet of quality audiences, which every client would desire to buy regardless of its media mix. I am proud to say that we have already become an integral part of the media mix of the vast majority of clients, we have transformed ourselves into a factor.
Who are your clients and how has your portfolio changed in the past two years?
We launched in 2018 with Discovery. We were not going to be able to kickstart the project without their trust. We added Scripps in 2019, Viacom and Eurosport joined in 2020 and the last addition to the bundle is WarnerMedia, which we are representing as of 2021. The local channels that we currently represent are WNESSTV – a modern channel, with a strong affinity towards upper middle-class female audience and Bulgaria ON AIR – a well-known to the Bulgarian audience polythematic channel.
We have created awareness about ourselves and about our success among the headquarters for the CEE region of all the international media groups and I believe that with time we will manage to embrace all the most important players in our portfolio.
Our audience share in the demographic 25-54 is expected to be above 8% in 2021. The audience of our channels is young, well-educated, and urban. The Sales House is a one stop shop for the kids advertisers having most of the best kids channels in our portfolio – Cartoon Network, Nickelodeon, Nick Jr and Nick Toons.
Have you planned an expansion of your operations outside of Bulgaria?
We do and are currently exploring options.
How has the coronavirus pandemic affected your business?
The coronavirus pandemic negatively affected all markets, but not equally. The ad markets in some CEE countries suffered marginally due to more stable economies or to governmental help. Bulgaria was not one of these markets and therefore the decline was substantial, especially during Q2. Like on other markets in the CEE region, the kids channels were more seriously affected than the 18-49 channels, as most of them heavily depend on revenues from non-purely kids advertisers, which took the opportunity to shift to the free and sometimes discounted inventory of the main channels. The officially reported decline of the TV ad market in Bulgaria is 13%. Our decline is lower on a like for like basis, we have performed much better than the market average.
In many TV markets there has been an increase in viewership during the pandemic. How has the TV demographics changed in Bulgaria?
The pandemic forcefully changed the habits of the people. The Bulgarians, which anyway watch TV much longer than the people in other countries, stayed in front of the TV screen for 5 hours and 48 minutes in 2020 vs 5 hours and 26 minutes in 2019. They watched 4% more TV in Jan 2021 vs Jan 2020. The viewership increased although some stations shrunk their programming cost, relying on the fact that the people were bound to stick to the most predictable and affordable entertainment – the TV. The excess of inventory in Q2 was impossible to sell, however the increase helped the TV stations during the especially strong Q4. For me it is much more interesting to monitor the development in 2021, a year we all expect to be much more significative than the previous.
What is your opinion on the current situation of the peoplemeters research in Bulgaria? There have been several appeals from market players for the setting up of an Industry Joint Committee, do you support that?
We are relived that finally, after almost 6 years, the Bulgarian market has gone back to the single peoplemeter system model. Unlike many, I believe the next step is not the establishment of an industry body - JIC or Users’ Committee. The next step should be related to reaching an agreement between the market players on sticking to same principles and pursuing a common goal – choosing the best system under fair conditions and dedicating efforts to establishing together a structure which should legitimize the choice and the entire market will respect and be a part of. Without this pre-agreement, even if a JIC is established, no one can guarantee the participation of any of the main media groups, should it not be content with it. The international channels, whose representatives we are, have the multi market experience and knowledge, which we believe should be appropriately used in Bulgaria.
What are your expectations for the Bulgarian ad market in 2021?
We are hopeful for a good year, a year of growth! The end of 2020 and what we witness in the beginning of 2021 suggests we will not be disappointed. I trust the prediction of the Association of the Communication Agencies in Bulgaria, which says the market will reach the levels of 2019 not earlier than 2022, though.
What is your strategy for digital media?
After the successful start of The Sales House and as its natural extension, we have established The Web House in partnership with our colleagues from Digital Marketing Group. This is a sales house for digital advertising and our partners are one of the biggest independent publishers in Bulgaria – Investor, Web Ground, Off News, Neg etc. The Web House is a one stop shop for advertisers and agencies which gives them an immediate access to the brand safe environment of over 100 high-quality Bulgarian web sites with more than 6 million visitors (cookies) per month. It is technologically based on Display & Video 360. The Web House ensures its clients accurate targeting, management optimization and reporting of highest quality.