How Much Are Your Preemptions Worth?

Dec 15, 2021 12:15:00 PM / by ShareBuilders

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Preemptions are something every station must deal with to some degree or another.  They obviously affect inventory management, but they also cost you money.  Preemptions have many layers to them; meaning they have an impact to your bottom line on many different levels; one of which, may not be so apparent.  Spoiler alert: We are talking about the time associated with the preemption.  Remember that time is money.  If you could avoid as many preemptions as possible, would you?  That was a rhetorical question.  In a perfect world, we would make the most of our inventory and avoid preemptions altogether.  Wouldn’t it be great if more of your booked spots actually ran where they were initially booked?  Also, a rhetorical question.  So, how much is a preemption worth?  Well, the answer is “it depends.”  Let’s explore.

 

The Problem

Obviously, the value of a preemption depends heavily on the dollar amount that’s attached to the commercial, and the amount of potential grief that can be caused by preempting that specific advertiser.  It’s no coincidence that a higher-dollar spot is likely also from a larger client.  The pain associated with that preemption is two-fold.  However, the bigger picture here is how much is our opportunity cost when we’re constantly re-selling the same inventory?  

So, let’s review the process.  First, someone must preempt the spot.  Second, the AE needs to be made aware of it.  Third, the AE must find an alternative program that would be acceptable to both the client and the station’s current rate card.  Fourth, the AE waits for approval from the advertiser to book the time, if it’s still available.  Multiply this by three to four different advertisers and you can see where we may be spending valuable time on something that’s already been sold.  Let’s take a look at each of these steps in the process.

 

The Process

Preempt The Spot

Whether it is new business or a valued returning client, the spot has been sold.  Even within this step in the process, the time that may have been spent analyzing the inventory, negotiating rates, putting together a package, and anything else associated with selling that piece of inventory is now gone with zero revenue attached to it until we make it good.  On top of that, this may be a situation where a long-standing client is now getting booted from a spot and you need to rebuild a rapport.  We are only in step one and we have already lost valuable time and possibly more.

 

AE Must Be Made Aware

You know your time is valuable, but that concept extends beyond management.  Your Account Executives spend precious time working with clients and selling inventory.  Time your AE spent booking this spot could have been spent nailing down a buyer that truly makes the most of your inventory.  That AE spent time selling a spot that will not be used and was paid to do it.  Now you need to make that AE aware of the situation so they can move on to step three.

 

Find An Alternative Program

The buyer paid for that spot you just booted them from, so now what?  Again, the AE will need to spend precious time sifting through your inventory to find make good spots to satisfy the client.  There is not always going to be avails with equal value waiting for make goods to fall into, so they may be stuck putting together a make good package for the client, which brings us to the next step.

 

Client approval

An alternative program has been found or a package put together, but we’re not done.  Now it is time to wait for the client’s approval on the make good.  That’s right, wait.  If all goes well, the client is responsive and happy.  If not, the client is not responsive, and the spot gets booked before you have approval.  Or maybe the client doesn’t sign off, at all.  If either of those are true, you’re back at step three.  Tick-tock, tick-tock.  Time is burning like dry wood.

Accurate pricing and inventory management is the key to minimizing preemptions.  Preemptions are going to happen, but the less time AE’s spend getting approval for preempted commercials, the more time they can spend working on new opportunities.  Time spent on preemptions is essentially time spent doing work that has already been done.  That’s not just tedious, it’s inefficient and directly effects your bottom line, especially when you multiply this process across a number of preemptions.  

 

The Solution

The ShareBuilder software helps you price your inventory in a way that gets the most out of your inventory by pricing based off demand.  When you tier your rates, you are able to drop rates where needed to fill inventory, while keeping rates high in those high-demand areas to avoid preemptions.  This has a three-fold impact.  First, you are able to fill your inventory as much as demand for your programming allows.  Second, you maximize your revenue because you are leaving as little money on the table as possible.  Finally, third, you are able to avoid preemptions because you are charging the rates that demand allows for any given program, thereby doing the work just once. 

When you do that, you are saving time, and therefore, money.  Not only are you able to use ShareBuilder as an effective tool in pricing your inventory, but you also get a comprehensive view of your inventory sellout, ideal sellout, and sellout trends based on your pricing over recent weeks.  With that, you are able to see in which areas sellout is most effective by a change in rates.  When you see those areas where your sellout has been climbing, you know where the demand is, allowing you to charge a premium and bypass any preemption problems.  Avoid preemptions as best as you can.  Use a software that gives you the best possible weapon to fight off preemptions and maximize your inventory the first time around.

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Written by ShareBuilders

ShareBuilders offers media sales empowerment and revenue growth tools, backed by a team of dedicated industry experts.