Furious's Blog

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.

As a seller, you presumably have collections of content that you bundle together based on audience, event type, and other variables (e.g., programming related to birds or cars). Then, you offer those bundles to clients for a “package rate.” That rate is usually either discounted to entice clients to buy at volume, or it’s limited inventory that you can charge a premium for based on availability (think NFL games).

It might surprise you to hear that most linear TV sellers are still driving 80% to 90% of their topline revenue from traditional, Nielsen-measured TV. While the future of TV is surely audience-driven, data-heavy and technology-enabled, it’s coming at us in slow motion. Rome is falling but only one brick at a time.

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In today’s media organizations, core business decisions are often made using Excel as the habitual tool of choice, overlooking the power of modern data science to improve outcomes. Big data can help you and your team forecast inventory more accurately to reduce makegoods, create data-backed rate cards that maximize value for each placement, and unearth insights from new, proactive reporting.

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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.

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Across the finance industry, the great Excel debate is alive and well, with ardent supporters on both sides. Why should those of us in media care what the finance industry thinks of Excel? Considering that many would say our businesses are duct-taped together with Excel, I think it’s worth some examination.

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As any media planner will tell you, forecasting views for TV can be overwhelming—and the consequences for mistakes can be huge. Underestimating the number of views means lost opportunity to sell inventory; overestimating results in a failure to deliver advertisers the guaranteed impressions promised and exposes a seller to liability risk.

We need to predict viewership days, weeks, sometimes months in advance, to carry out sales deals. Since views for linear TV can change drastically—even within the same series from week to week—what is a planner to do?

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News of Nielsen being on the block has been swirling as of late. Couple that with the threat from major broadcasters to walk away from the measurement giant, and the growth of Addressable TV offerings leads us all to the very real potential of a completely reimagined measurement paradigm for TV; but what would that look like?

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Change your sales processes (i.e., don’t hamper your rate card changes before you’ve begun)!

Last week, we talked in detail about building a TV rate card of the future, built on data-driven decision-making to result in more optimal pricing. But, as we advised, making improvements to your pricing logic will mean nothing if you don’t hold people to the integrity of your rate card.

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There are two levers you can pull to affect TV media yield: price and inventory allocation. Here, we’re going to focus on price. When working with clients who sell linear television on a spot basis, the most significant form of revenue leakage that we see is due to price variability—which itself is a symptom of pricing inefficiency. In other words, fixing your pricing optimization is the most meaningful, fastest way to make a significant impact to yield. And yes, if we’re talking about pricing efficiency, we’re going to be talking about TV rate cards.