New Solutions for Tough Times

As TV executives scramble to cut costs and find new revenue, vendors of software for selling and scheduling advertisements are positioning their systems as tools to minimize administrative overhead associated with the ad-sales, scheduling, reconciliation and billing processes.

Companies such as Harris Corp., VCI Solutions and WideOrbit are even pointing out ways their traffic software can create new business for TV-based clients. Harris and VCI have each forged partnerships with Google TV Ads in an effort to help their customers find new advertisers who may have never produced a TV ad. So far, that opportunity has been limited to the cable and satellite segments of the market.

For broadcasters, the technological prescription for success is to load a broader variety of sales and scheduling options into the same database, so that the traffic and sales department can handle a range of tasks such as business on digital subchannels, ad placement on the station Website, and opportunities such as digital signage, event sponsorships and print ads.

Incremental revenue

As news and entertainment options proliferate, broadcasters need to spread their resources around in search of incremental revenue, says Eric Mathewson, CEO and founder of WideOrbit. “The overall market pie isn’t changing a lot, so this is what they need to do to look more favorable to advertisers than their competition,” Mathewson says. “NBC has a channel that loops on taxicabs within Manhattan and video billboards in Times Square, and some gas stations have a small video monitor running a loop. All that, they were able to light up in WideOrbit without adding incremental bodies.”

While Harris’ OSI Traffic product is most closely associated with traditional linear television, “people are coming to realize that it also works nicely with the Internet, additional digital 24-hour news channels, radio and newspapers—all that off one platform,” says Harris Morris, VP of media and workflow for Harris. The company has also added support for managing ads on digital signage.

Dispatch Broadcast Group of Columbus, Ohio, has added two digital channels as companions to its CBS and NBC affiliates, and also runs the 24-hour Ohio News Network on cable. It runs all of those channels on a single OSI system with an integrated sales and traffic team.

Lilly Television’s WENY Elmira, N.Y., an ABC affiliate that was WideOrbit’s first customer, is taking advantage of the switch to digital broadcasting to spin off a CBS affiliate known as WENY-DT2. Lilly also operates a CW station in the Elmira market.

Lilly co-founder Brian Lilly, who serves on WideOrbit’s board, says technology helped make his staff more productive, supporting more products with the same number of people. In what he acknowledges will be a tough year, the broadcasters who stay focused on serving their communities will survive better than those who panic: “If you’re cutting your news product, cutting staff on that side, it’s not going to help you grow your business in the long run.”

A key focus for traffic vendors is analyzing the data that flows through sales and traffic systems to tease out patterns from past sales that can help future sales efforts.

John Larrabee, VP for North America at U.K.-based Pilat Media, argues that the data warehousing programs included in his firm’s software are in a position to analyze all of the data about a station’s business and answer questions, such as whether the money being paid for syndicated programming is justified by the revenue it is attracting.

Pilat wants to be for television what SAP and other enterprise-resource-planning software vendors offer to the manufacturing world—one central system that manages key data for every aspect of the business. Pilat’s IBMS is not a traffic management software product per se, but rather aims to provide a comprehensive television business management system with traffic as just one module.

Although it has more customers in Europe, Pilat has made inroads with sales to Media General and installations at five local Fox stations. Pilat’s new business intelligence module, first implemented for Fox, allows television managers to analyze operations across many dimensions.

“If you’ve got a system that is analyzing this data on a day-to-day basis and you see that one station is doing very, very well, you can immediately look to see what it is they’re doing better,” Larrabee says.

While Pilat is pushing a unified suite of software, VCI Solutions is touting its integration with other TV software products, such as Storer TV’s SIMS program management product. By improving the application programming interface to VCI’s Orion Business System software and actively partnering with other vendors, VCI says it is providing a “best of breed solution” with the ability to mix and match software from several vendors.

In a similar vein, VCI’s new partnership with Google, announced earlier this month, could provide existing Orion customers with a new means to sell inventory and generate revenue. Harris first struck its deal with Google last October, and its customer Bloomberg TV has been leveraging the integration between OSI and Google TV Ads to make advertising inventory available for sale to Google advertisers. Harris executive Morris says a second, yet unnamed cable customer has also entered the Google TV Ads arena, “and we’re also seeing a great deal of interest in that relationship from traditional broadcasters.”

Although ad-starved local broadcasters may be ready to consider working with Google TV Ads as an alternate sales channel, Google is still evaluating whether it will move beyond cable spots. The company may move cautiously after scuttling its advertising initiatives for radio and newspapers over the past two months.

“There are a whole host of engineering and operational challenges and differences we need to evaluate to determine the level of effort required and the execution feasibility,” says Mark Piesanen, director of strategic partner development for Google TV Ads. On the other hand, the Google TV Ads program has already cleared similar hurdles, from working with satellite operator Dish Network, its first beta customer, to partnering with cable operators and cable networks, Piesanen adds.

One of the main things Google offers any segment of the TV market it enters is access to “new to TV” advertisers who are willing to experiment with TV ads because Google makes it easy for them. Piesanen says that’s the fastest-growing segment of his customer base. Google advertisers, many of them small businesses, are offered the option of creating a TV ad from the same Web-based control panel they would use to place an advertisement on and its affiliates.

The Google AdWords program was designed to make it easy to create text-based ads that appear when users of the Internet search engine enter specific keywords. Advertisers bid on the keywords in an automated auction process, and the amount of the bid helps determine how frequently and prominently the ads are displayed.

While Google applies the same auction model to buying TV spots, producing a television ad is more complex than entering a few lines of text. So for customers who don’t have a video ad ready to upload or submit on tape, Google offers a “marketplace” of video production companies that have partnered with the search giant. Google has also teamed with SpotMixer, a Web-based service that allows companies to create their own TV ads by mixing and matching images, video and animation with their text and narration.

The relationships with Harris and VCI are important, Piesanen says, because the software from those companies manages exactly the data Google needs to inform its customers of what advertising opportunities are available for bidding.

“The reason why [we] did these partnerships with Harris and VCI,” he says, “is they make the integrations with our partners and common customers faster, easier and more comprehensive.”