Traffic Systems Seek Scale, Depth, Breadth
Software for ad scheduling grows more sophisticated
By David F. Carr -- Broadcasting & Cable, 2/24/2008 7:00:00 PM
When LIN Broadcasting moved to consolidate most of its television operations around two regional control rooms in Indianapolis and Springfield, Mass., about four years ago, one piece of technology that made the move possible was a traffic management system that could handle advertisement scheduling for multiple stations.
“I think it works very well,” reports Scott Blumenthal, executive VP of television for LIN, a customer of the Orion system from Video Communications Inc. (VCI). “We used to have 48 people at all of our stations doing the same function. Now, we have 14 people, and overtime for the last two years has been zero. So we’ve been running pretty clean.”
Blumenthal counts on VCI to help guide him through other industry transitions as well, such as the addition of Internet advertising to the revenue mix of LIN’s TV stations. “As we get into cross-platform selling and multimedia, of course we want to do single invoicing. The onus is on these guys to keep developing the software and handle new types of revenue.”
Booking space on a Website for a banner ad or promotional video isn’t much like slotting an ad into a TV schedule, but the responsibility is still falling on the same sales and traffic management staffs at broadcast and cable operations, which in turn want to manage all kinds of ads through the same system.
“The industry is changing so fast,” says Larry Keene, CEO of the Traffic Directors Guild of America (TDGA). “The typical TV station is now managing not only the over-the-air signal but HDTV and a second or third channel. A lot of them have spun off a news service on local cable, with all news, all the time. Then you have the advent of another incredibly successful revenue source, which is the Websites. So now the job is not just 'here’s our schedule for today or tomorrow.’ but all of these other things.”
Traffic management software is essential to the task of juggling it all, says Keene, whose organization conducts quarterly customer satisfaction surveys of users of the different products. The traffic vendor who made out best in the latest survey was WideOrbit, followed by Harris Corp. with its OSi product line, and VCI’s Orion (see chart). (ProTrack, which primarily serves the promotional needs of public TV stations, ranked almost as high as WideOrbit.) The full report, available to TDGA members, provides more detail on factors such as the responsiveness of the vendor’s technical support and its willingness to adopt suggested new features.
BUILDING A SCHEDULE
The basic function of traffic management software is to build the schedule for a TV or cable channel, producing a precisely timed plan for when commercial breaks within programming will run and which advertisements will appear within them. That schedule is then handed off to either control room staff responsible for implementing the plan or to an automation system that will execute it directly.
During the sales process, the system also generates reports that show what’s available to be sold. And after the fact, the same system is used to reconcile the plan with which ads actually ran and generate the bills. If something went wrong, or if the advertising schedule was interrupted by an event such as breaking news, the system helps the traffic director determine whether the ad can be rescheduled or whether the advertiser is owed a refund or credit.
“This is the most important, mission-critical operation that broadcast and cable organizations deal with every day,” says Ed Adams, VP and general manager at Harris Corp. Modern traffic management systems are making it easier to manage with drag-and-drop control over which ads fit in which time slots—a dramatic change from the terminal-based software most stations were using until recently.
“One of the challenges most traffic teams have is that they’ve been on their current systems so long that migration to new systems always challenging,” Adams says. “But today it’s welcome,” he adds, where in past years traffic directors were often reluctant to make a change. The difference now is they are all facing new challenges that the software promises to address, he says.
“The Internet is still an emerging business model, so we need to be flexible and creative about how the campaigns get done,” Adams says. Fortunately, although Web advertising is certainly different from TV in that it doesn’t fit into the same kind of linear schedule, his firm’s products have for years managed other types of non-linear advertising such as billboards that stations sell as an adjunct to TV time, he says.
“The broadcasting industry has really been working with non-traditional revenue sources for quite some time,” agrees Sarah Foss, an executive VP at VCI. Paid promotional events, product placements and product mentions have all become part of the mix and none is scheduled quite like the traditional 30-second spot, she points out, “so the Web, for us, is just an evolution of that.”
With all these changes coming, VCI strives most of all to make its software “agile,” giving the maximum flexibility to adapt to trends that have yet to emerge, Foss says.
Consolidation of operations, in the mode of what LIN Broadcasting has been doing, is an even stronger trend—not necessarily new, but intensifying, Foss says. “Station groups can get huge economies of scale by centralizing facilities. Technology changes have allowed them to do it effectively and keep local identity almost pristine.”
The same kind of consolidation happening in broadcast “is in a sense happening in cable as well” as cable networks are increasingly bought up by larger companies, says John Sorenson, president of Broadway Systems, a specialist in cable ad management. The difference is that, lacking the spectrum limitations of broadcast, new cable networks are also being created all the time. Although most of the big traffic management vendors cover both cable and broadcast, Broadway tries to excel in the peculiarities of cable and has won customers such as Fox News Channel, HGTV and the Food Network.
Pilat Media, a U.K.-based company not widely known to U.S. traffic directors, is also making inroads with its IBMS (Integrated Broadcast Management System) product, which has been purchased for use by the 35 stations in the Fox Television Stations division of News Corp.
Pilat’s VP for the Americas, John Larrabee, emphasizes that is not “just a traffic management system” like some of the others but “more akin to the world of enterprise resource planning [ERP], like SAP,” a major ERP vendor.
The analogy is to the way an enterprise resource planning system tries to encompass every aspect of corporate operations—for example, in manufacturing, everything from sales and inventory management to manufacturing scheduling and supply chain management.
In the same way, Pilat aims to deliver a system that encompasses programming and complete financial management, as well as ad scheduling. “When we were talking to Fox, what they’ve said to us was they didn’t want another traffic system—they wanted something broader.”
Harris is also working to create a broader suite from the wide range of software products it has developed or acquired, while at the same time the definition of what a traffic system is “keeps getting grayer and grayer,” says Adams. “These systems are being asked to do more and more.”
|What the Pros Recommend|
|The Traffic Directors Guild of America asks its members to rate systems. Here’s how they answered the question: “Would you recommend this product to another station?”*|
|Product||Score (1-10 scale)||No. of Responses|
|*TDGA believes that the higher the number of respondents, the higher the level of credibility for any comparisons that may be made between systems.
**Primarily used for public television sponsorship announcements.
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