The marketplace for buying and selling TV advertising has never looked like this before.
As if struck by a tornado, the majority of Tier 1 programming was wiped out. Live sports are gone entirely with no certain return date, and the volume of new primetime programming available for networks to unveil in the fall will be limited due to ongoing production delays.
What This Means for Sellers
For seller organizations, convincing buyers to re-express their investments and not cancel the lion’s share of spend is going to require a redefinition of what “premium inventory” means in the era of COVID-19, when live sports, tentpole events and high-value programming have been forced out of the equation. Pricing and planning, inventory, and sales teams will need to coordinate in new ways to identify opportunities to create packages that let national advertisers achieve most of the reach and targeting that Tier 1 buys would have yielded.
Now that most premium inventory has abruptly vanished, and what remains is oversold, sellers are challenged as never before to have accurate visibility and understanding of the volume and nature of their inventory capacity and when it can be delivered. They’re also being creative with content and scheduling to maximize revenue from programming that can suddenly command larger audiences and higher prices in the absence of greater competition. ESPN’s 10-part documentary on Michael Jordan, “The Last Dance,” which was originally to debut in June but was brought forward to April, is a shining example that will go into the history books. It had been eagerly anticipated in some quarters, but the hype around it intensified as a result of basketball fans having no games to watch.
How to Drive More Value from Underutilized Inventory
For the vast majority of standalone programming, however, rates can’t be raised just because Tier 1 content is gone. In order to keep both local and national advertisers from walking, sellers need highly effective inventory management to drive more value from underutilized inventory (think traditional Tier 3 inventory that’s often sold as a broad rotator.) From there, they need to create packages that come close to replicating the reach and audiences that buyers would normally seek from high-value programming. These new packages won’t sound as premium or prestigious, but they can deliver similar results.
This reset can be a blessing for sellers since it’s compelling them to obtain a deeper understanding of audiences across the entirety of their portfolio. Delivered through data-driven packaging, it will unlock dormant ROI for buyers that was sitting in existing capacity.
The key is to develop a much deeper understanding of the audience profiles of lower-value programming that’s typically sold within dayparts and broad rotators — and, thus, doesn’t usually require the same analysis and active management as live sports and tentpole events. Armed with those insights, sellers can define new packages for TV buyers that enable them to reach large audiences of relevant consumers, such as women between 18 and 34. Viewers that for now will be reached via Tier 2 and Tier 3 programming with smaller respective audiences (e.g., shows on Bravo or the OWN Network), strategically bundled together.
The Power of Data-Driven Inventory Management Solutions
The analysis required to develop new sales packages is hard because the pool of inventory is large and the possible combinations and permutations are mind-bending. It’s made even more complicated right now by the fact that historical performance of networks and content may be entirely unreliable. Decision-making against such uncertainty requires an unusual level of cooperation and collaboration, and the sense of shared purpose of survivors in a lifeboat. It also demands a powerful inventory-management system that provides outstanding forward visibility to accomplish what is a fundamentally different approach to planning. The universe of “tracked programming” that organizations actively manage, sell and package will need to be enlarged to compensate for the missing tentpole programs.
Our industry is facing alarming headwinds, giving new meaning to “disruption.” But the good news is that an investment in dynamic, data-driven inventory management solutions and the related teamwork needed to be successful in adversity will serve your organization long after COVID-19 is just a memory. Even in a bull market, inventory should be managed actively so that underutilized segments are included more often in packages served to advertisers and revenue isn’t left on the table. Furious’ platform, PROPHET, improves the speed and accuracy of your inventory visibility, analytics and decision-making functions by leveraging sophisticated data science and machine-learning technologies to make packaging recommendations that are calibrated to maximize the value of your portfolio as a whole.
The bottom line is that the technology and processes sellers adopt right now to drive more value from their inventory should continue to be best practices when Tier 1 programming has returned.