Micah Malloy

November 22, 2022

The Broadcast TV Revenue Audit is not helping our business

Every day, in every broadcast television station, Account Executives and Sales Managers strategize how to win the largest share of a client's or advertising agency's business. The typical strategy is rate reduction and added value (free stuff) to WIN the business! Most "Successful" stations factor their current inventory sellouts into the equation; however, if the piece of business on the table is large enough, rates will be dropped, and added value will be applied regardless. The cycle continues the next day and the day after, and soon enough, the business you WON recently will be negatively impacted with preempts by the business you WON today. Going for "Share" is the Mantra of most stations. The 3rd Party Broadcast TV Audit, the ultimate "Share" measurement apparatus, is the reason for this never-ending cycle. I recommend we stop using the Broadcast TV Audit as the barometer of a station's success for the three main reasons below.

revenue-share-number-1.jpg


The number one reason we should no longer use a Broadcast TV Audit to measure a station's success is that we NOW compete with more than just linear broadcast TV for advertising dollars. From streaming TV to Google, clients have so many more options today. If we continue to measure a station's success only against the linear TV industry, which is not growing, we will become irrelevant sooner than later. In addition, being content with a "Share" of the Broadcast revenue can limit transformational revenue-generating ideas that would attract and retain more customers.

Another reason not to use a Broadcast TV audit anymore is the law of diminishing returns, which states that profits or benefits gained from something will represent a proportionally smaller gain as more money or energy is invested. Stations invest too much time (money) and energy into the endless cycle of selling a schedule, preempting that schedule, finding make-good opportunities, and finally placing that make-good schedule. Suppose you were to analyze the Profit Per Customer by calculating the time each person on the staff (Account Executive, Account Manager, Local Sales Manager, Traffic Coordinator, and Log Coordinator) spent maintaining a client's "Share" schedule. In that case, you might decide to change the way you do business.

Finally, I suggest we all cancel our Broadcast TV Audits to provide a better experience for our customers and employees. The linear broadcast TV business has too much friction in the pre-sales and post-sales processes. The way we do business has hardly changed in decades. Even the technology we use is antiquated! As a result, our clients and employees must navigate the needless Share-Grabbing chaos creating dissatisfaction and turnover for both.

Being more relevant, reducing diminishing returns, and providing a better customer and employee experience are three good reasons to stop using a Broadcast TV audit to measure a station's success. Instead, spending more time (money) and energy on customer solutions and ideas will be more profitable and sustainable.