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Our recent white paper, “Spinning Data Into Gold with Data Science” lays out how media sales organizations, including broadcasters, operators and cable networks , can turn their data into useful and actionable insights, resulting in higher earnings per share (EPS). Companies that aren’t effectively harnessing their data risk lower performance through missed revenue opportunities and inflated costs.
Here are a few examples of areas that might be leading to “revenue leakage” and cost inefficiency. Gaps that may be closed by effective use of current data management techniques and data science.
STOP REVENUE LEAKAGE
Today, many organizations base their forecasting on historical data, which is necessary, but by no means sufficient for high accuracy. Collecting and incorporating current market intelligence is essential for developing supply and demand forecasts and predictive models to optimize financial performance across a media portfolio.
Some of the pitfalls of poor-quality forecasting include underpricing inventory, needing to issue makegoods to compensate for audience under-delivery, and locking in too much inventory in upfronts at a discount, which can reduce historical rate averages for a program long into the future.
Conversely, data-driven forecasting takes into account many factors that can improve accuracy, including:
- Competing programming
- Comparisons to similar programming
- Anomaly detection, such as increased views for a single episode due to a celebrity cameo
- Heavy marketing promotion for a show that inflates viewership
When data is siloed and not being leveraged for accurate forecasting, media companies are unable to maximize revenue for each placement. For example, pricing might be set by fiat, instinct or judgement rather than by near real-time input or predictive models. When consistently using automated data-driven rate cards, the results speak for themselves: Our clients are seeing up to 10% revenue improvement year-over-year with rate card automation.
Poor Rate Card Adherence
Building effective, data-driven rate cards only works if your organization adopts and uses them! Furious provides clients with rate-change control systems, rate change approval workflow, and rate card adherence metrics that measure how closely individual sellers (or sales teams) adhere to published rate cards when closing deals.
Cannibalizing Revenue Streams
Companies may risk cannibalizing revenue from one channel (e.g., linear TV) in favor of monetizing another (e.g., addressable TV), instead of monitoring total revenue produced by all available inventory. It is a common pitfall that data science can help you to avoid. Generally, the mix of channels is determined far in advance by a “hard carveout,” such as allocating 10% of inventory to OTT. Those allocation decisions are usually based on history, judgment or guesses rather than by using active data, refreshed regularly, to determine the most profitable balance of inventory.
REDUCE COSTS THROUGH EFFICIENCY
In addition to stemming revenue leakage, data management, data science and sales automation can drive productivity and reduce operating costs.
Moving from Tacit Knowledge to Documented Processes
Research shows that 42% of the skills and expertise needed for a given position reside only in the person’s mind, creating problems when there is employee absence or turnover. Using a software platform to automate repeatable or manual processes reduces human errors and enables your staff to do the value-added work that matters most to you and to them—and it enables quality work to continue even when employees change.
Reducing “Time-to-Discover” Data with Meaningful Front-End Reporting
Instead of digging through a spreadsheet, time can be saved through aggregation and normalization of data using data science. As a thought experiment, imagine it takes a user four minutes to log into two different systems, export two Excel spreadsheets and then combine the two reports. Compare that to a 20-second lookup in a system like Furious’ PROPHET.
Elimination of Systems and Software
The effort to collect, store and process data from the many information silos in media companies has produced a cottage industry of data warehouses, data visualization and data management tools in addition to Excel, the Swiss Army knife of desktop software. The result is having even more systems to pay for to compensate for the weaknesses of your core systems. The Furious PROPHET platform, which is purpose-built to optimize media sales effectiveness, can help you simplify your workflow, and eliminate some of the additional systems that otherwise would be needed to pull multiple data sets together with combined reporting.
These are just a few examples of ways that organizations can improve their EPS with data science. To learn more about how data science can reduce revenue leakage and improve cost efficiency, download our white paper, “Spinning Data into Gold with Data Science.”