Fox, Hearst-Argyle and Tribune are among the TV-station groups that will spend 2004 at least investigating whether they want to change their traffic system. The question they and others face is what should they be looking for?
There's little doubt that the trend in traffic-system purchases is towards the group buy. Lowell Putnam, president and CEO of vendor VCI, says a little more than half of his company's deals are group-wide whereas, a couple of years ago, only 30% were. The reason? More and more, the groups are realizing that they need a relatively uniform system in place in order to better apply business intelligence.
While they may be buying group-wide, though, they not necessary be deploying centralized traffic systems.
"There is certainly an efficiency to running the system from one piece of hardware," says Bob Duncan, senior vice president, sales and marketing, for Encoda Systems, "but, when you talk about centralizing a traffic or sales department, the return on that is very complicated."
That's because it's not as simple as reducing head count. The return on centralizing involves improving network connectivity and also making sure that new processes are followed closely. If they aren't, any gains in productivity can be offset by having to fix errors in the system or simply to track them down.
The unfortunate reality of a new traffic system is that it will most likely lead to lost advertising revenue in the short term. "There can sometimes be a negative impact with advertising clients," says Tom Hulpquist, director of marketing for Encoda. "The worst scenario is a loss of income because the system isn't tracking spots properly." Therefore, traffic system vendors recommend deploying a system slowly across the group rather than all at once.
Hulpquist also points out that there's a long learning curve. The station will gain some functionality but will also lose some. For example, reports that it has come to depend on from the old system may not be available in the new system. So the station needs to adjust how it runs its business, a major reason groups are moving slowly.
Taking baby steps in the deployment can minimize potential errors or, at least, keep them localized to one station and one market. Once the new workflow is understood and the traffic system properly hooks into the on-air playback system, then it's ready for broader deployment across a group.
"You have to tier it because you want to consolidate the knowledge," says Ed Adams, president and co-founder of OSI, "so that the stations that learn the system first can teach it."
Once the decision is made to change systems, the process of picking the right system begins. Today's traffic-system customer is faced with a multitude of choices: different styles of interfaces, different types of evaluation tools and different types of databases.
It's often the database that defines how the system works. An open database, for example, can enable the sales data to be extracted in any way and also allows additional analytical tools to be added later.
Another question facing the group is whether they want the stations to share one database, cluster four or five stations around regional databases, or have a different database for each station. Each approach has its upsides and downsides.
"If you have only on database, that's all that has to be maintained," Adams explains. "You don't want to duplicate data."
A centralized database also makes it easier to pull together data and to back it up. On the other hand, it can be trickier to get up and running. For example, very thorough workflow policies and procedures need to be put in place and followed. If any of the stations decide to do their own thing in terms of processes, the group won't gain any advantages from having a centralized database.
Given the huge amount of day-to-day business entrusted to a TV station's traffic system, Putnam says, the reliability required is similar to that of a local utility. Station personnel can't afford to think about the system's functioning, and the traffic-system vendor makes sure the system is current, stable and running properly. That also means the vendor should have a consistent track record, ensuring that it will be around for years to come: A traffic system is not the kind of system a broadcaster wants to replace quickly.