STUDY BACKS TV AD POLICY SHIFT

By Published on .

Most Popular
TV stations aren't managing their advertising inventory properly.

That's the conclusion of a major new study conducted by McKinsey & Co. and the Teller/Gorman Group, New York, scheduled to be unveiled this week during the Television Bureau of Advertising's annual conference in Las Vegas.

The study, commissioned by the TVB, looks at the future of TV advertising and examines key issues for TV station marketers.

Using a research technique known as a "best practices study," the researchers interviewed executives of stations that perform better than the rest of the market, particularly stations that have a higher ratio of advertising share to TV ratings share.

The researchers found that those stations generally use an inventory management approach to the sales of their ad time, while others focus on building market share from a specific account.

"It destroys some old myths," said Ave Butensky, TVB president. "It almost says that if you're 100% sold out, you're not doing your job."

Mr. Butensky said the finding is bound to spark some controversy during the conference, because "A lot of stations and reps push for share. They would not agree with this thing."

Michael Gorman, a principal of Teller/Gorman Group and one of the authors of the study, said under an inventory management approach, stations set their ad prices based on revenue goals and modify the prices based on fluctuations in the marketplace.

"Under inventory management, stations offer different prices to different clients to get more money," he said. "The key here is that you systematically plan for each account, for each month and for each program, and work toward that plan. Rather than responding to how much you think you can get from that guy based on how hungry they sound."

In this article: