Unsold inventory signals lost revenue and opportunities. As a broadcast sales professional, you have a goal of selling the right inventory at the right time to the right customer. That’s not always a simple task, but there is a way to find this alignment and control the demand on your inventory to ensure that high-demand slots aren’t oversold and that low-demand periods generate more revenue. To do this, you’ll want to leverage yield management in broadcast sales.
If you aren’t familiar with the concept, don’t worry. Our experts will provide you guidance on what it is and why broadcasters should adopt it.
What Is Yield Management?
Yield management is not exclusive to the media sales world. It’s something that airlines and hospitality mastered. You’re likely aware of the changing availability and pricing when booking a trip. There is real science behind this that allows airlines and hotels to optimize their sales. For example, hotel room costs fluctuate because of seasons, level of demand, number of rooms already sold and other external factors. With all this data, hotels could sell identical reservations at different prices.
This concept, as you can see, correlates to the broadcast world. It combines data, decisions and deal-making that drive a pricing optimization strategy for your commercial airtime inventory.
Its purpose is to maximize revenue by making it a more manageable endeavor to meet your goal of selling the right time to the right customer at the right price. When applied correctly, yield management in broadcast sales can boost your profitability.
Even amongst highly disrupted markets, yield management enables broadcasters to set a pricing strategy across their assets, optimized for each piece of inventory, enabling sales teams to engage with customers more strategically.
How Does Yield Management in Broadcast Sales Increase Revenue?
Yield management takes effort but is worth it. According to experts in the field, broadcast revenue can increase by at least 1%, leading to an uptick in profit of 8%.
How do you achieve that bump in revenue? Let’s look at why yield management drives it:
- You’re covering the costs and maximizing your inventory.
- Your inventory is your key revenue-driving asset, so it makes sense to price it optimally.
- Inventory doesn’t last. Once aired, it is gone. You can no longer sell it or reprice it.
- You can shift more price-conscious advertisers to lower-demand days to fit their needs.
- While you’re managing costs and the bottom line, this discipline gives an equally important focus on growing the top line.
- Effective yield management can deliver revenue growth potential without increasing the number of programs, promotional costs or new inventory.
- You can negotiate better with customers.
- It improves revenue forecasting accuracy by predicting future demand fueled by data.
Adopting Yield Management for Your Organization: First Steps
Implementing a yield management program is achievable without too much disruption or a significant learning curve. It all starts with accessing data and asking these questions:
- Do you know how much inventory you have, how much is sold and when?
- How do you currently price? By program, month, week, day, time?
- How do you sell? Packages, customized campaigns, by program or different inventory types?
- How much do you know about your competitors’ trading terms and pricing?
Driving Profits with Yield Management
After answering these questions, your organization will need to kick off the program. That will include buy-in from all stakeholders, data analysis workflows, selecting technology tools and training your sales staff. You should also develop KPIs (key performance indicators) to inspire, measure and reward success.
Your customers may notice a change, and it’s vital they understand and engage well ahead of the next negotiation. A well-trained sales team leading the change will make a significant and long-term difference to the program’s success.
Yield management requires effort and focus but can pay huge dividends. However, sustaining this bump in profits requires scalability, meaning you need technology to support it, which is one of the critical aspects of Marketron REV. As REV is a yield management tool for broadcasters, we customized it to fit the industry’s sales models regarding inventory. You can learn more about REV by requesting a demo with our team.