In part two, we take a look at ways in which media and advertising companies can adopt intelligent B2B commercial technology to deliver a more dynamic rate-setting, negotiation, and proposal process. Read part one here.
How do we hit a moving target?
In the last 20 years, change has been the only constant for the media and advertising industry. The audience drives everything: where they are, how they spend, what they consume. The explosion of digital and streaming platforms has only increased the volatility of this moving target. Similarly, B2B distributors and manufacturers have been forced to evolve and embrace dynamic pricing capabilities.
The way it’s always been done: As we covered in part one, ad rate negotiations have followed a static model for decades, mostly predicated on precedents set in the past with little analysis factored into CPM changes. In the TV world, the scatter (or spot) market contains inventory that is sold after the network upfronts, generally at a higher rate. However, with the upfront model perhaps changing for good and the more dynamic connected TV (CTV) taking over, scatter-like negotiations will become the dominant mode. Media platforms must enhance the rigor with which they approach point-in-time rate-setting and negotiation.
Why it must change: Digital advertising has now eclipsed network TV advertising. Yet, most media companies’ data infrastructure and sales process haven’t changed with the times. This leaves them ill-equipped to respond in real-time with competitive rates that achieve revenue goals.
The solution: “There's a big need for a tighter B2B sales process and data science-driven tools. Media continues to evolve, with lots of different ways media is being consumed,” said PwC Principal Ron Otocki. “It just adds complexity when you try to have multiple models but multiple pricing structures. There is a need for software that can structure everything and keep everything in a dashboard that people can track.”
Traditional B2B companies have found the answer to meeting increased customer expectations in a volatile cost environment by standardizing on one pricing system of record. This approach, combined with a real-time pricing engine, pushes the right price changes to every customer touchpoint instantaneously. This same principle can be applied to the media world. Speed and intelligence is the winning formula in today’s rate-setting environment.
How can we improve the negotiation process?
Continue reading "Ad Selling = B2B Selling (Part 2)"