NEW YORK – A recent study of leading cable and broadcast TV companies indicates that many of them are leaving 3-15% of advertising revenues on the table. The study also found that the companies could recover their loss though the strategic use of yield optimization technologies for their advertisements and programming content. The study was conducted by RSG Media Systems (www.rsgmedia.com), a leading provider of software applications for the media & entertainment industry and digital publishers.
Yield optimization is the interaction of technology, people, and business processes towards a common goal - the application of disciplined tactics that predict consumer behavior at the micro-market level and optimize product availability and price to maximize revenue growth. Though the travel and transportation industries have used yield optimization tools for many years, it is only with recent breakthroughs in technology that the media and entertainment sector has been able to follow suit.
The study found that by using yield optimization technologies and revenue management techniques, broadcasters can significantly improve ad sales revenues and can drive results in five key areas:
• Forecasting: Accurately predicting program audiences and their demographic breakup so that companies can better allocate inventory (in Planning) and schedule (in Delivery) the spots;
• Pricing: Systematically parsing inventory pressure, customer demand, and other market forces to price packages and deals optimally;
• Planning: Optimally allocating available inventory to meet the agency and advertisers’ goals without sacrificing other opportunities;
• Delivery: Placing ads onto the log to best meet advertising targets and minimize advertising shortfalls and required “make-goods” (ADUs)
• Promotion: Selecting the placement of promotional spots to maximize program ratings and increase reach while minimizing the use of valuable air time.
The study was conducted by RSG Media Systems with five leading TV broadcast and cable companies in Q1 and Q2 2010 and involved running data through the models and measuring optimized results against real historic results.
“The companies involved in the study are some of the world’s largest cable/TV programmers, and because each one is different, our approach to this study was to do a proof-of-concept using their actual data,” said Dr. Sriram Subramanian, director of RSG Media System’s yield management practice. “Once we analyzed the data, we found the results made it clear that without yield optimization technologies, the companies were missing out on valuable revenue opportunities.”
About RSG Media Systems
RSG Media Systems (www.rsgmedia.com) creates software products to manage and monetize media properties. The company’s products include: RightsLogic®, an enterprise rights and royalty management solution; Planit™ an ad sales proposal management system; AdVant™, optimizing ad sales revenue software designed to assist media companies in maximizing revenue, and Zoox™ digital ad sales software for pricing, inventory, and analytics groups. RSG Media Systems also designs strategies and implements custom technology solutions to meet its clients’ needs. Established in 1985, the company is headquartered in New York City.