A sales consultant I know was recently telling me about one of his clients. He said the stations were experiencing a rough period — this is unusual? — and some days as much as 69% of the available inventory was going unsold.
The stations were only selling 31% of their ad time.
I asked if the stations were using a yield management system.
The answer was “no”, because management felt “rate integrity” was important. They thought “yield management” was another way of saying “cut rates”.
Well, rate integrity is important. And so is flexibility. What these station’s management doesn’t realize is that yield management can give you both.
With a well-run yield management system, your station’s rates adjust to the advertiser’s demand. The higher the demand, the higher your rates. If the demand drops, your ad prices drop with it. The goal is to sell more time, have less “wastage”, and increase yield.
So here’s a question for any station that hasn’t considered yield management: Is it better to get something for an ad slot or nothing? Changing 31% sold to 40% or 50% sold can and will make a big difference to your bottom line.
If my friend’s stations see the light, I’ll report the results here. But if they continue on their stubborn path of not considering a good yield management system, they’re missing out on the best of both worlds.