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Budgeting and Forecasting. The Good, the Bad, and the Ugly. What’s your method?. Throwing Darts Fortune Teller Tell Them What They Want to Hear and Hope It Happens. What Does Corporate Want?. How can you give them what they want? Where can you go for help?. Resources. - PowerPoint PPT Presentation
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Budgeting and Forecasting
Budgeting and Forecasting
The Good, the Bad, and the UglyThe Good, the Bad, and the Ugly
What’s your method?What’s your method?
• Throwing Darts • Fortune Teller• Tell Them What They Want
to Hear and Hope It Happens
• Throwing Darts • Fortune Teller• Tell Them What They Want
to Hear and Hope It Happens
• How can you give them what they want?
• Where can you go for help?
• How can you give them what they want?
• Where can you go for help?
What Does Corporate Want?What Does Corporate Want?
• Historical information– National revenue– Market revenue– Revenue by month– Revenue by month by
advertiser– Revenue by month by
salesperson– Revenue % change– Multi-year trends
• Historical information– National revenue– Market revenue– Revenue by month– Revenue by month by
advertiser– Revenue by month by
salesperson– Revenue % change– Multi-year trends
ResourcesResources
The ProcessThe Process• 24/7/365• Preliminary• Final
• 24/7/365• Preliminary• Final
NarrativeNarrative• Local economy• Advertising• Competition• Staffing• Pricing
• Face the facts– You have to do it– You have to do it right– You have to do it by a
deadline• Schedule the time• Assemble all your tools
and resources
• Face the facts– You have to do it– You have to do it right– You have to do it by a
deadline• Schedule the time• Assemble all your tools
and resources
The ProcessThe Process
Getting StartedGetting Started
• The first step in projecting the future is examining the past– 3 year trends– YTD– % of total by month
• Pacing numbers to determine current trend
• Project revenues through end of year
• The first step in projecting the future is examining the past– 3 year trends– YTD– % of total by month
• Pacing numbers to determine current trend
• Project revenues through end of year
• Economic environment
• Advertising environment
• Competitive environment / station competitiveness
• Staffing realities
• Pricing realities
• Economic environment
• Advertising environment
• Competitive environment / station competitiveness
• Staffing realities
• Pricing realities
Factors to consider...
• Market Health• Employment Conditions• Retail sales
• Market Health• Employment Conditions• Retail sales
Economic Environment
Where to look…• RAB.com• Business Journal• Chamber of Commerce• Online Searches
• Audit firms
• Voicetrack
• Rep reports
• RAB Revenue Reports
• RAB Ad-to Sales Report
• Station audience
• Audit firms
• Voicetrack
• Rep reports
• RAB Revenue Reports
• RAB Ad-to Sales Report
• Station audience
Advertising Environment
• Pull Top 20, 100, 200
• Are their revenues increasing or decreasing? Why?
• 80-20 customers
• Strategy for retaining/growing existing business
• Strategy for growing new business
• Pull Top 20, 100, 200
• Are their revenues increasing or decreasing? Why?
• 80-20 customers
• Strategy for retaining/growing existing business
• Strategy for growing new business
Pull Traffic Reports
• Sell more clients?
• Sell current clients more often?
• Sell at higher rates?
• Sell more clients?
• Sell current clients more often?
• Sell at higher rates?
What Are Your Objectives?
“You can only take care of your own station(s).”“You can only take care of your own station(s).”
Competitive Environment
• Ratings
• Projected ratings
• Power ratio
• Market revenue
• Ratings
• Projected ratings
• Power ratio
• Market revenue
Station Competitiveness
• Who is your primary competition?
• Who is getting what shares?
• Competing media strengths and weaknesses
• Are there any new competitors? Who?
• Who is your primary competition?
• Who is getting what shares?
• Competing media strengths and weaknesses
• Are there any new competitors? Who?
Competition
• Current skill set and any plans for improvement
• Projected changes in the staff and your plan to respond
• New hires or planned new hires
• Projected staff size
• Experience vs. Expertise
• Your recruitment plan
• Current skill set and any plans for improvement
• Projected changes in the staff and your plan to respond
• New hires or planned new hires
• Projected staff size
• Experience vs. Expertise
• Your recruitment plan
Staffing Realities
Manage to your goals…Manage to your goals…
Pricing Realities
• Corporate or self-defined• % increase or hard number• Criteria• Top line (sales) or bottom line
(BCF)• Cluster or individual station(s)• National• Local• New business• NTR• Inventory pricing strategy
• Corporate or self-defined• % increase or hard number• Criteria• Top line (sales) or bottom line
(BCF)• Cluster or individual station(s)• National• Local• New business• NTR• Inventory pricing strategy
Crunching the NumbersCrunching the Numbers
• 13 columns• Back up your work• Learn Excel• Create line-items
– Local– Regional– National
– On air– Alternative Revenue– Event– Digital
• 13 columns• Back up your work• Learn Excel• Create line-items
– Local– Regional– National
– On air– Alternative Revenue– Event– Digital
Budget TemplateBudget Template
• Account• Category• Last year’s actual by month• Projected billing by month• Dollar change• % change
• Account• Category• Last year’s actual by month• Projected billing by month• Dollar change• % change
Salesperson’s BudgetSalesperson’s Budget
Salesperson’s Budget PrepSalesperson’s Budget Prep
Increase AnnualsIncrease Annuals
Expense BudgetingExpense Budgeting
• Zero based• Justification• “Outside the box”• Budget for RAB and other training
• Zero based• Justification• “Outside the box”• Budget for RAB and other training
• Market value of 1 share point
• Projected rating or programming changes for your station(s)
• Projected rating or programming changes for competing stations
• Planned promotional and/or marketing initiatives
• Market value of 1 share point
• Projected rating or programming changes for your station(s)
• Projected rating or programming changes for competing stations
• Planned promotional and/or marketing initiatives
Other considerations…
For a budget to have a chance of succeeding, your staff has to buy in and take ownership of the numbers
Without their commitment, effort, and perseverance, you cannot achieve the goals
Involving them in the budgeting process sends the message that it is their budget, too
For a budget to have a chance of succeeding, your staff has to buy in and take ownership of the numbers
Without their commitment, effort, and perseverance, you cannot achieve the goals
Involving them in the budgeting process sends the message that it is their budget, too
Staff InvolvementStaff Involvement
Your Numbers
Your Staff Numbers
Combined Input
Individual goals should be challenging
Individual goals should be obtainable, with effort
Compensate achievement
Reward over-achievement
Individual goals should be challenging
Individual goals should be obtainable, with effort
Compensate achievement
Reward over-achievement
Staff InvolvementStaff Involvement
Your Numbers
Your Staff Numbers
Combined Input
Sales people should be responsible for submitting their individual revenue projections to you at the beginning of the budgeting process.
They should include all revenue subsets you are required to submit.
For example, monthly, quarterly, and annual totals, NTR, new business, agency/direct, etc.
Sales people should be responsible for submitting their individual revenue projections to you at the beginning of the budgeting process.
They should include all revenue subsets you are required to submit.
For example, monthly, quarterly, and annual totals, NTR, new business, agency/direct, etc.
Staff InvolvementStaff Involvement
Your Numbers
Your Staff Numbers
Combined Input
Three Approaches to Projections by Sales PeopleThree Approaches to Projections by Sales People
1. Sandbagging2. Pie-in-the-Sky3. Aim for the Center In your one-on-one budget meeting
with sales people, you have to know which approach they are taking and factor it into your “negotiations” with them. Insist on knowing their rationale and challenge them to explain their fallback plan.
1. Sandbagging2. Pie-in-the-Sky3. Aim for the Center In your one-on-one budget meeting
with sales people, you have to know which approach they are taking and factor it into your “negotiations” with them. Insist on knowing their rationale and challenge them to explain their fallback plan.
• ROIIf the money is spent, how much return do you estimate from the investment
• Bonuses for exceeding goal
• ROIIf the money is spent, how much return do you estimate from the investment
• Bonuses for exceeding goal
ExpensesExpenses
Budgeting and Forecasting
Budgeting and Forecasting
The Good, the Bad, and the UglyThe Good, the Bad, and the Ugly
