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Yield Optimization Overview
Seeking to boost ad sales revenues amid a flattening market challenged by a burgeoning number of channels and online competition, major television networks are doing something unusual. Instead of just relying on creative forces to generate hit shows they are turning to the innovations of decidedly unglamorous mathematicians and software engineers at RSG Media to boost their profits using Yield Optimization—a science more commonly found on the manufacturing floor than in Cable & Broadcast. The results have been substantial.
Most people are familiar with Yield Optimization from airline tickets. Airlines adjust their prices to make sure that they fill as many seats as possible. After all, the airline cannot sell a seat once the plane leaves the gate. At the same time, the airline wants to charge as much as it can for each seat. In the same way, TV networks want to ensure that they sell their entire inventory of ad units and maximize their revenues. But the Ad problem is even more complex than simply selling out the “flights”.
What makes RSG’s approach successful is the 6 separate modules, applying Ad Sales Revenue Optimization techniques to each part Ad Sales Lifecycle: Pricing & Forecast, Reserve Planning (Upfront vs. Scatter), Deal Planning, Log Scheduling, Deal Maintenance, and Stewardship. By addressing each of these critical areas separately they have found new ways to use existing ad inventories more effectively and extract significantly higher revenues.