When it comes to growing digital advertising revenue, broadcasters everywhere are figuring out their next best steps forward. As our customers continue down the digital transformation path, one of their biggest challenges is to find the balance between maintaining strong on-air products and developing new digital opportunities. In fact, some broadcasters have likened this challenge to “trying to change the tires on your car while driving down a highway at 60 mph.” At the same time, these customers recognize the significant business rewards that await – all that is needed is the courage to get started and a solid plan.
Like any great business transformation, adding digital products to the advertising mix requires a phased and carefully considered strategy. Designing your digital product suite – an ideal mix of your owned digital product inventory and products from third parties – should be an integral part of this new business model. Once you’ve got a good grasp of your current digital products and their sell-through rates, you’re well-positioned to figure out which third-party digital inventory will enhance your product mix.
In order to zero in on the third-party products that are right for your business, we suggest you focus your research on these three questions:
1. What types of inventory are available?
There is quite a range of third-party digital inventory vendors out there, and each one has unique offerings. The table below outlines the types of digital advertising inventory options in the marketplace. The internal operations portion assumes the third-party vendor will be responsible for buying and optimizing the digital inventory on your behalf.
2. Why will advertisers buy your inventory over a competitor’s?
Since any advertiser in the marketplace has access to these third-party inventories, it is up to broadcasters to work with digital vendors to create unique product bundles. Competitive positioning designed to win business and maintain margins is centered on the following parameters:
- Quality of inventory. The pricing of digital inventory works similar to radio inventory. Premium inventory is more expensive and is determined by viewable placements, the brand safety of the content adjacent to the ads and targeting capabilities.
- Customer experience. Creating a simple, repeatable and reliable advertiser experience will set any broadcaster apart in today’s ecosystem. That includes delivering on what was promised and maintaining personalized, real-time interactions. Broadcasters who make the buying experience turnkey for advertisers will win and retain the most business.
- Digital inventory bundled with unique broadcast opportunities. Third-party digital inventory delivers audience scale to existing broadcast opportunities such as personality endorsements, event and/or station sponsorships, and social media content. Integrated media plans for existing broadcaster products will create a clear competitive advantage.
3. How will third-party vendors work with your operation?
When selecting a vendor, it is critical to understand how the third-party digital inventory will integrate into your operational platform. Look for third party-vendors that can integrate into your system with ease and have limited data entry platforms. Broadcasters and vendors should agree on the following connection points:
- Effective training to keep pace with the ever-evolving digital marketplace.
- Proposal development that tracks with the speed and scale of digital growth.
- Orders entered correctly into both broadcast revenue and digital production systems (a single-entry point is preferable).
- Placement of third-party digital inventory that is geared to meeting targeting expectations.
- Deliver digital inventory as ordered to ensure transparent and accurate revenue reporting and margin analysis.
- Accurate invoicing to collect revenue.
Now you have created a product suite that is a highly attractive mix of traditional radio and digital inventory, including both O&O and third-party products. Congratulations, you’re well down the path in your digital transformation – but what’s next? At Marketron, we can show you how to take your next steps on your digital journey. Contact us if you are ready to take your station’s offerings to the next level.