Every year, budgets for OTA TV ad revenue get harder to hit. TV is no longer the only channel to reach customers. Declines in advertising spending for traditional broadcast continue while investment in digital advertising grows. You’re keenly aware of these spending shifts but might not have the solution yet.
In trying to lift OTA revenue, you may have approached it with many strategies. A multifaceted approach is critical for such a complex challenge. So, what works, and what doesn’t?
Improving OTA TV Ad Revenue: Which Tactics Work?
Some strategies are more effective in addressing increasing OTA TV ad revenue. Let’s dive into what works and what doesn’t.
Creating More Inventory
In industries with a physical product, creating more inventory can help them reach higher revenue goals, as long as costs don’t balloon. It’s not as simple when talking about ad spots. We all have 24 hours in a day and only so many spots to fill within these. Ad spots are finite and time-constrained. Pushing more spots into a time frame could be effective, but you expose the potential for missing sellouts.
There’s also a cost to adding more inventory that can reduce any expected revenue bump. In this scenario, more isn’t better.
Raising Rates Across the Board
The other common way to improve revenue is by simply raising rate cards across the board. You can do this by a flat percentage across the entire inventory, or you may create tiers of increases depending on the type of programming and the ratings it receives.
This can work in the short term, but advertisers may push back and want to know why. You could answer that you’re doing this for every customer and that it’s based on various factors. Still, they’re paying more for something that didn’t really change. It could also be a blow to how much of their advertising budget you get if they perceive digital tactics or other OTA channels as a better value.
Pricing Increases for New Customers Only
If you don’t want to raise rates holistically, you could increase pricing for new customers. They don’t have a frame of reference for what they were paying. Again, this could be helpful in the short term, but it’s not sustainable. Even with advertiser categories that can’t play in the digital space, they’ll only invest to a certain point. You can price yourself out of the market if you adhere to this rule.
You know it’s a hit or miss if you’ve tried any of these tactics. You may close a new advertiser at a higher rate and have a long-term customer cut spots in one day. It’s a volatile way to improve revenue, but what about using technology and data together?
Increasing OTA TV Ad Revenue with Data and Technology
The most consistent and proven way to boost revenue for OTA spots is with data-based rate optimization. With this technology, rates aren’t the result of intuition or some complicated spreadsheet formula. Instead, data is the basis of the number. That data includes the demand of the inventory via real-time availability, timelines, historical pricing, floors, ceilings and discount tolerances.
Your sales team doesn’t have to do the work because technology does it for them. A dynamic pricing tool delivers the most optimized rate at the time for a specific spot. The spots you sell during programming don’t have to remain flat. That’s because they shouldn’t — some are in higher demand than others. Implementing this drives a 5% top-line revenue increase at a minimum.
So, why aren’t you using dynamic pricing? It can seem inaccessible or overly expensive through some solutions, which depend on data scientists.
Those barriers to deploying no longer apply with Marketron REV. A core feature is the dynamic pricing (or yield management) functionality. It’s easy to use, intuitive and integrates with traffic systems for real-time avails. REV offers even more benefits like simple order entry and powerful reporting. It’s a revenue management platform that covers the entire sales process.
See how REV can improve your OTA ad revenue today!