As a broadcast media industry executive, you’re accountable for setting sales and pricing strategies for all available spot and non-spot inventory in your region or market. Your ad space is a perishable product that customers book in advance, and you’re under intense pressure to deliver organic revenue growth in the face of declining ratings and fierce price wars in an apparent race to the bottom. Your salespeople are bogged down with spreadsheets, trying to patch reports from disparate data systems. The result: less time strategizing with clients and closing deals. Your revenue managers spend more time making gut-based judgement calls on monthly demand and revenue forecasts. The consequence? Unrealistic expectations on rates needed to achieve your plan, leading to a culture of last-minute panicked selling. However, it doesn’t have to be this way, and lessons can be learned from an unlikely source.
Problems facing the broadcast media industry are very similar to those faced by the hospitality industry. Most hotel companies also have a perishable product (hotel rooms) that customers book in advance. The goal is to sell the right product to the right customer, at the right price, and at the right time. How a hospitality executive goes about setting revenue-maximizing pricing and sales strategies can be a lesson learned for those in media. The best practices that leading hotel companies follow are directly applicable to the broadcast media industry. In fact, leading media companies are already taking these lessons to heart.
Most leading broadcast media companies already have a sophisticated Revenue Management system in place to help them automate a wide variety of manual tasks, to get a consistent view of available inventory, to scientifically segment their customer base into granular levels based on customer behavior, and to accurately forecast demand and pacing for each customer segment up to 24 months in the future. These media companies use predictive solutions to eliminate busywork – giving managers a 360-degree view of their business. Their sales people spend less time pulling data and reports across disparate systems, and more time with clients not only understanding their current needs, but also uncovering new ones. Their teams spend less time making gut-based assumptions to feed a manual, spreadsheet-driven budgeting process and more time making decisions backed by predictive rate cards. Additionally, these sales teams go from a panicked selling mindset, trying to increase revenue by driving rates down, to identifying key revenue drivers while optimizing pricing and bundling strategies specific to individual advertisers.
These are the broadcast media companies who are living in the present, and preparing to compete in the future. The others are dinosaurs still living in the past. Don’t get left behind.