Ad Sales

A major source of revenue generated by television networks comes from ad sales. (still looking for a rough percentage of how much)                                    The ad sales department traditionally consists of the actual sales force including employees at the assistant level, Sales Planners, Account Executives, Sales Manager, Vice President and President. Other departments that fall under sales or work directly with the sales team are Pricing and Planning who manages inventory, Sales Coordination who places units in programs and creates on air logs, Commercial Administration who is responsible for inserting the spot, getting it on air and running it by the correct guidelines of the advertiser, Standards and Practices will review spots to ensure they are appropraite to air and Integrated Sales who work on added value, features and specific sponsorships.

How it works

The currency used most in TV ad sales is a CPM. The CPM represents the price that it cost to reach one thousand viewers. It is calculated by taking the total cost of a campaign divIded by the total impressions delivered in the campaign schedule for example $100,000/5,000,000 = $20.00 CPM. Deals and CPM's are negotiaited during the annual televison upfront time period starting in May. The media buying agencies who represent the actual advertisers will register budgets with various networks in hopes to guarantee a certain amount of impressions for a desired demographic. Proposals are made and negotiated between buyers and account executives in May for the upcoming year. A final dollar amount, schedule and guaranteed amount of impressions is then ordered up.Networks usually sell 80% of their inventory in advance during this upfront period and the other 20 is sold in the scatter market which tends to be closer to the actual airing of programs and also comes at a premium since the inventory is limited by that time. Networks need to make yearly budgets which are created by reviewing available inventory to sell, projected sell out levels, a networks distribution, and estimated ratings.

Integrated Sales and On-Air Promotions

Many advertisers today are looking for custom ideas when it comes to advertising on television networks. More then ever, people today can fast forward through commercials or switch to another medium to consume their media. It is crucial for a televeision network to keep their audience, grow their audience and to offer innovative and custom solotions to their clients. Integrated Sales and On-air Promotions play an important role in the business aspect of the network. They also work together at times creating custom content for advertisers. as mentioend above ad sales is a key revenue generator for the networks and since they sell programs based on rating estimates it is important for the program to actually achieve those ratings. On-air promotions directly effects the business of ad sales since it's main objective is to raise awareness of programs, encourage the intent to view and finally help meet the ratings goals. The Integrated Sales department is responsible for organically and innovatively integrating advertisers product on air. When the demand for custom integrations is so high it is important that the integrated sales team is on their A game. Advertisers want more then spots and dots, they want to be in show, in game, have their logos on screen to catch the eyeballs. If the Integrated Sales team creates a package that is in-line with the advertisers goals the sales team may see increased budgets and return customers. On-Air Promotions and Integrated Sales work together on many projects. For example an on-air promo campaign may be running on ESPN for Sunday night baseball and that campaign will have Coors Light branded to it. Both teams will work togeterh to communicate t

On-Air Promotions and Advertiser's ROI

The most important thing that On-air promotions will do to support the business of ad sales is the actual campaigns which hopefully result in ratings

If a rating estimate is not met the network takes on liablilty and will owe the advertiser impressions and spots. Not only is liabilty being inccured but the underdelivery of a deal can have implications on next years negotiations. Advertisers may reduce their spend, may not come back at all, or may demand a cheaper CPM. One of the main factors in measuring the success of an On-Air Promotions campaign is to see if the ratings estimates of a particular show are met. If the network sells the show based on a 3.0 rating and that is the actual rating achieved then the campaign has paid off. All the money, hardwork and production can be justified. An even better measure is if an actual rating comes in higher then its estimated rating, this is now putting the network in the plus and will give the sales force good leverage in negotiating the next deal. Focus groups and surveys taking place during specific On-Air Promotions can also return positive feedback to the network if the intent to view is strong.

Money comes from parent department budget. 

MTV Networks, on-air promotions can fall under programming OR marketing, depends on channel.  On-air design usually falls under marketing and works closely with the off-air design/print departments. 

Turner Broadcasting (Cartoon Network, Boomerang, TCM, TBS, TNT, CNNetc) – Creative Services is a separate department with its own budget working in close co-operation with Programming and Marketing. 

ROI = higher ratings? 

Research department can determine which campaigns work best 

Distinguish between quantitative and qualitative research 

Use of Focus Groups 

Maybe we should consider having a separate page to dicuss the role of research?

One of the most fundamental questions is "Does on-air promotion work?" Research over the years clearly indocates that it does. Here are two links to some research results demonstrating the effectiveness on on-air promo campaigns: http://www.simulmedia.com/2009/07/yes-on-air-promotions-work/ and http://findarticles.com/p/articles/mi_m6836/is_4_47/ai_n25080269/?tag=content;col1 (this is an academic article examining audience targeting but it has a good bibliography of other research on the impact of "promotion frequency, distance, construction, clutter and placement".

Other internal benchmarks: awareness, intent to view, reach/frequency/GRPs.... executive praise

Integrated Marketing

i)       How does the business work: who sells what to whom and how is the money made?

ii)    What constitutes a target “margin” or ROI? Is this a profitable enterprise?

iii) Patterns of financing for production projects (including raising venture capital, foundation funding, government funding, advances on distribution, commercial projects, etc.)

iv)   How is success measured in this segment?

(1) By ratings?

(2) Box office?

(3) Sales?

(4) Critical Praise?

(5) Market share?

v)      Industry Benchmarks: reports, studies, organizations that regularly report on a field. For instance, search the Department of Labor.