Are You “Buying” or “Renting” My Inventory?

Apr 10, 2024 3:15:00 PM / by Mark Bretsch

Jan Blog- Bill-2

In the past week, I’ve heard from numerous stations detailing a troubling trend: significant cancellations from an advertiser who initially committed substantial business for Q2. These cancellations have left stations reeling, not just financially but also operationally, as they had structured their rate cards and inventory projections around the anticipated revenue from this client.

Cancellation Challenges

What's particularly frustrating is that these cancellations fell within the typical "two-week" cancellation window, which means the advertiser faced no penalties for pulling out of the deal. It begs the question: Is it time for the broadcasting industry to reassess its cancellation policies?

Policy Reevaluation

Bill Blog- Feb (4)Consider this: Broadcasting is a rare breed of business where supply is fixed, but demand is variable. Yet, unlike other industries like airlines, hotels, or even your local barber, there's no consequence for clients who decide to back out of their commitments. Airlines offer discounted rates for non-refundable tickets, hotels have varying cancellation policies based on flexibility, and your barber might charge you the full rate for a last-minute cancellation. Why should the broadcasting industry be any different?

The Political Season

As we brace ourselves for what promises to be an intense political season, especially in key battleground states, stations must tighten up their policies, especially regarding political ad bookings. Remember the chaos of 2016, when stations were left holding the bag with heaps of unsold inventory due to eleventh-hour cancellations spurred by fluctuating polling data?

Potential Solutions

Anita Blog- FebOne potential solution could be to request a non-refundable cash deposit upfront to secure advertising slots. Yes, there's a risk that some advertisers might take their business elsewhere, but it's a calculated gamble that stations must consider. After all, it's better to have some guaranteed revenue upfront than to be left scrambling to fill vacant airtime later.

Ultimately, there's no one-size-fits-all answer to this dilemma. Each station must weigh the pros and cons and decide what works best for their specific circumstances. But one thing is clear: In an industry as dynamic and competitive as broadcasting, it's crucial to adapt and evolve our policies to ensure long-term sustainability and success.

Tags: Media Sales, ShareBuilders, Radio, TV

Mark Bretsch

Written by Mark Bretsch

Director of Consultants at ShareBuilders

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