This video explores the ways in which portfolio optimization in media is similar to investing in securities as well as the principles TV sellers should follow to maximize their yield. It’s the seventh in a series of educational videos Furious has produced in collaboration with Beet.TV. Below is a sampling of Part 7.
The best practices underpinning portfolio optimization for media and financial services are fundamentally similar, and finance principles can be instructive for TV networks and distributors.
Investors don’t make the most money or manage risk by focusing on only one asset class, to the exclusion of all others. Instead, they try to maximize the entire portfolio—finding the right asset class mix and allocation to deliver the highest risk-adjusted return. Similarly, every media seller’s obsession is (or should be) with packaging and pricing inventory in a way that maximizes their yield, or the total revenue available from their entire pool of inventory.
Many seller organizations are currently siloed, with teams solely dedicated to linear, digital or specific ad products, which can be highly counterproductive. For a seller organization’s portfolio optimization strategy to succeed, teams and individuals need to be incentivized to work toward the same revenue goals that have been set at the organizational level.
Sellers also need to introduce quantitative metrics that their entire organization, from account executives and ad traffickers to senior leadership, can tap into quickly to understand the progress being made toward portfolio optimization. I would recommend introducing a KPI like inventory efficiency to measure the efficiency of every dollar spent by your top 20 advertisers. The ultimate goal is for teams and individuals to focus less on the revenue secured and more on revenue that’s been left on the table.
To learn more about the principles that TV sellers need to live by to make their portfolio optimization strategies a success, click here.
This video was presented by #BeetU. For more videos from the event, please visit this page.
The original article was published by Beet.TV on May 20, 2020. The original article can be viewed at https://www.beet.tv/2020/05/portfolio-optimization-beetu-7.html.
