For Broadcasters: Does Scale Always Equal Success
For Broadcasters: Does Scale Always Equal Success?
Today's media landscape has seen decades of consolidation and acquisition leaving some broadcasters with a massive collection of stations and markets in hopes of a greater chance to thrive through increased scale. Scale referring to the size and reach of a media company's network of stations and channels, including both traditional linear television, OTA radio, and digital platforms. The importance of using that scale lies in the ability of companies to leverage their network to maximize audience reach to grow advertising revenue all while becoming more profitable. As the trend of broadcasters acquiring additional stations continues, companies need ways to take advantage of their scale and the growth experienced in recent years. But size doesn’t instantly equal better reach, or efficiency, or profits. The act of acquiring new stations is not enough. Companies must also lay the foundation for the basics after acquisitions, such as investing in standardized systems and tools so that each market isn’t on a different legacy application and creating consolidated data platforms to have holistic visibility across the enterprise. This allows them to define goals and a roadmap for efficiency, sales, and broader services before investing accordingly.
One company pushing forward in this endeavor is Nexstar, which has launched a digital platform called STELLAR, allowing advertisers to seamlessly purchase advertising across their network of 199 owned or operated television stations, 120 local websites, and 284 local news and weather mobile apps. This centralization of technology and process has allowed them to not only sell more effectively, but also to standardize pricing and packaging across different markets. For example, a national buyer looking to purchase advertising across 50 different markets would no longer have to call each station individually, streamlining the process for all involved.
Scale doesn’t always mean bigger coverage in top markets only. Townsquare Media has a portfolio of 357 local terrestrial radio stations in 74 U.S. markets strategically situated outside the Top 50 markets in the United States. Given their smaller market focus often meant there was a gap in service for their advertisers. By launching a digital market business that could solve their customers' needs beyond ads sales, the strategic vertically integrated focused gave the resilience operating through the pandemic. Additionally, the company has been expanding its digital marketing capabilities through the acquisition of digital marketing agencies that provide services such as social media marketing, search engine optimization, and website design.
But while the benefits of scale are clear, the actual work that goes into achieving it can be a challenge. Different processes and technologies must be put in place to ensure that everything runs smoothly, and back-office functions must be centralized, or at a minimum standardized, to support the new structure. Despite these challenges, however, companies like Nexstar will get the chance to show that with the right strategies and resources, it is possible to take advantage of scale and streamline operations in a meaningful way.
Centralizing resources means having to ensure multiple systems are integrated. CRMs, proposal, traffic, finance, pricing, systems, to name a few, all must be a part of a plan tackling data consolidation. Navigating crucial system integration can seem like the primary task at hand; however, only considering these systems may not truly maximize your newly expanded operation. To take immediate advantage, broadcasters can look at pricing and yield management. Working across 50 markets and calling each one for pricing is not practical. Having a centralized system across your ad tech stack can help maintain efficiencies that all feed into dynamic pricing model, helping you maximize ad sales revenues.
Scale does not bring efficiency automatically and can often add complexity. Scale, unmanaged, can lead to chaotic processes, disjointed systems, more inefficiencies, and therefore reduced profits. To fully take advantage of massive scale, technology must become a trusted partner in this journey. Centralizing beyond traffic and proposal systems can accelerate broadcasters ability to take advantage of their new found scale.
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