As broadcasters strive to maintain their share of advertising revenue against their upstart Internet competitors, they are finally making the labor-intensive process of buying on-air spots easier.
Next month, the first phase of ePort, the Television Bureau of Advertising’s (TVB) computerized system for ordering, processing and invoicing TV spots, will go live as a handful of ad agencies begin ordering spots electronically instead of using the long-established model of sending faxes to stations and having staffers manually re-key the data.
TVB is currently testing the ordering functionality with major vendors of agency management software such as Donovan Data Systems, Mediaplex, Arbitron and Strata Marketing, and a few select ad agencies.
In the second quarter of next year, the rest of ePort’s functionality will enable a suite of electronic transactions including avail requests, electronic proposals, spot make-goods, revisions, changes, log times, discrepancy reports and invoices, all through open-standard XML-based software.
“We’ve rallied unanimous support for an open-standard system, and we’re working hand in glove with broadcasters to make implementing ePort a priority on their list,” says TVB executive vice president Abby Auerbach.
The $5 million initiative, which is being funded to the tune of $2 million by NAB with the rest coming from station groups, will create a free Website that will let smaller stations that might not even have traffic software take advantage of the electronic ordering functionality. EPort is also designed to make selling nontraditional inventory easier for stations, whether it be commercials on digital subchannels, ads on station Websites, mobile platforms or even billboards.
“By using one standard schema that all systems pass back and forth, ePort will improve functionality and provide a competitive difference,” says Auerbach.
Major vendors of station traffic system software such as VCI Solutions, Harris Corp. and WideOrbit are responding to ePort by making sure their software is able to electronically interface with ad agency management software and station sales software using ePort’s standard XML schema.
VCI, for example, has already publicly proclaimed that its Orion traffic system will be able to communicate with OneDomain sales software to support ePort functionality when it launches next month.
“TVB is obviously pushing this very hard, and they want to make sure as many people on the selling side of it, the station side, are prepared to support it as possible,” says Lowell Putnam, VCI president and CEO and one of ePort’s leading proponents. “It will make it easier for everybody, to the extent that [orders] can be electronically imported as opposed to printed out and re-keyed. And ePort is designed to be used even if your internal system couldn’t generate or report transactions electronically. Even if you’re a small facility that’s only using spreadsheets, you can use the Web browser approach.”
Ed Adams, vice president and general manager of North America Media for Harris, is involved with both the buyer and seller sides of the ePort integration effort. Adams, who was president of independent traffic vendor OSI before it was acquired by Harris for $32 million last year, now oversees Harris’ OSi-Traffic, OSi-AdConnections station sales and SpotData invoicing software as well as Harris’ agency and rep firm software.
“From my perspective, I get to see all sides of it, and it’s kind of fun for me in a lot of ways,” says Adams. “We’re trying to assist as much as possible.”
In addition to making sure the software systems under the Harris umbrella can all communicate with each other via the ePort schema, Adams is also overseeing the ePort integration process between OSi-Traffic and third-party sales and ad agency software from competitors like OneDomain and Donovan Data Systems.
In the long run, ePort should make Adams’ job easier, as compliance with the TVB standard schema replaces ongoing custom integration with proprietary third-party software. He also thinks it’s a necessary goal for the industry at large.
“Spot TV is still very labor intensive, and until we get that in hand, that’s critical,” says Adams. “Ad agencies are saying that if we don’t find a solution soon, stations are going to be losing parts of their revenue as more advertisers find alternative ways to get their message across to the consumer.”
Sales of Windows-based OSi-Traffic are going strong, says Adams, as more station groups look to centralize their traffic operations and manage their inventory from a common database, and Harris makes good on its strategy of tightly integrating OSi-Traffic with its master control automation software. OSi-Traffic has picked up group-wide deals from Cox Television, Young Broadcasting and Pappas Television in the past year and is now deployed in some 625 stations.
As more engineers and operations managers consolidate their databases, “They’re centralizing their back office, which gives them an advantage now and sets them up nicely for the digital [multicast] channels that are coming,” says Adams.
A More Manageable Forecast
One of Harris’ newest customers for OSi-Traffic is one of those new multicast channels. Weather provider AccuWeather is using the system to manage national inventory for Local AccuWeather Channel, a 24-hour weather service that is currently broadcast by some 40 affiliates via their digital television spectrum (100 stations in total have committed to carry the service).
Local AccuWeather Channel, which launched last year with its own manual traffic system, began using OSI for the Local AccuWeather Channel service in February, says Ryan Ayres, director of TV operations for AccuWeather. It now uses the software to manage some 288 30-second national spots per day, as well as static advertising placements that sit in the graphic “L-bar” running across the bottom and left-hand side of the picture screen.
VCI has also seen “very good growth” over the past year, says Putnam. Its traffic and billing software supports some 380-400 TV channels in North America today, he says, ranging from small-market broadcasters like WHVL State College, Pa., up to national cable networks. VCI has supported multichannel operations for years, and picked up some new business from stations carrying The CW or MyNetworkTV as secondary affiliates broadcast on their digital spectrum.
Roughly one-third of VCI’s business comes from cable networks. One of its new customers is BET, which has rolled out the Orion system on the companion BETJ network. BET initially outsourced the traffic operation for BETJ to Comcast, explains Dave Pack, manager of business applications for BET, and Comcast used VCI to handle its traffic function. After BET replaced a spreadsheet-driven proposal process with Invision’s DealMaker sales proposal system, which was already proven to work with VCI, it decided to take the VCI database back from Comcast and move it in-house.
BET now plans to move its flagship network, currently running on an aging Harris JDS system, to VCI in early 2008.
Like Harris, VCI is also seeing the centralcasting or “hubbing” trend continue among its customer base, particularly since it also sells master-control automation software. But instead of centralizing master control and traffic like VCI customers Ackerley, LIN TV and Clear Channel did six or seven years ago, groups today are focusing just on the traffic system itself, says Putnam.
“That’s still a very strong area, and a lot of people are trying to figure out the right combo, whether it is hubbing automation and master control versus hubbing the business systems. People are looking at it from a productivity and workflow perspective, and asking, does this give us better control? In both cases, people are continuing to examine that and look for ways to do it.”
One broadcaster that is firmly committed to hubbing is NBC Universal, which runs traffic operations for NBC and Telemundo stations from regional hubs in New York; Miramar, Fla.; and Burbank, Calif. Last spring, NBCU committed to using WideOrbit’s WO Traffic to replace all of its traffic, sales and billing systems.
WO Traffic was rolled out to the 13 Telemundo stations between April and August, says Debbie Brooks, director of broadcast traffic for the NBC stations, and it will eventually replace aging Harris BMS systems at the 10 NBC-owned stations, too.
“As a [former] traffic manager, I’m impressed with the functionality of the core traffic product,” says Brooks. “From a corporate standpoint, compared to what we had on the BMS system, the reporting just blew that away, as you can do customization of reports for each user. It just met all of our requirements in terms of reporting, and works for us strategically with the current centralization of the broadcast hubs.”
While the NBC deal is obviously a coup, business overall is good for WideOrbit. The San Francisco-based company has doubled its staff in the past two years to handle increased sales, focusing on implementation specialists, account managers and customer support representatives, and now has the capability to install up to 18 stations in a month compared to six in January 2006. Its traffic software is now used by more than 600 TV stations, cable networks and digital subchannels.
According to WideOrbit founder and CEO Eric Mathewson, constant incremental improvements to the WO software have been the key to success for a product based on five-year contracts (like all traffic systems). He estimates that WideOrbit has received some 28,000 feature requests from customers—most very minor—since its start in 1999, and satisfied perhaps 25,000 of them.
“Customers want a stable, proven system that performs consistently, and we have worked really hard at customer satisfaction and proving we can do the job for them consistently,” says Mathewson. “These are five-year, no-cancel contracts, so it’s clearly a partnership [for the station] when hiring a new system. I think what will always be first and foremost is everyone’s looking for yield maximization, as traffic systems are the revenue backbone of the station.”
New features for WO Traffic this year include a “Copy Order and Change Station” function that makes it easier to create orders sold as a station cluster, user-defined order types that for allow for inclusion/exclusion from reports, and a “Billing Groups” function that will support electronic transactions for alternate call letters per TVB standards.
A relatively new entrant to the North American traffic market is U.K.-based Pilat Media, which got its start in television by developing a content-management system for satellite broadcaster BSkyB in the late 1990s, then branched into sales by adding sales-proposal and traffic systems. Pilat, which has a U.S. office in Denver, offers rights management and scheduling software in a package it calls the Integrated Broadcast Management System.
Pilat has gained some significant customer wins for IBMS, announcing a deal with the Fox station group in 2005 and a group-wide deal with Media General last year, but its actual deployment on U.S. soil has been relatively slow. Fox has only fully deployed IBMS at one station, WTVT Tampa, and Media General is still in the planning stages, says John Larrabee, VP of North America for Pilat.
Larrabee says that Fox is still moving ahead with its centralized implementation of IBMS, which will manage traffic for the station group from a data center in New Jersey. “Because our system is broader and covers many different areas in a station,” he says, “they are being cautious as they roll it out within station groups.”
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