Maximize Your Underwriting Revenue by

Managing Your Inventory

Kirk Nelson, CRMC

Vice President, Sales & Marketing

Inventory Behaving Badly

• I always have tons of inventory…

• I have plenty of inventory, but Morning Edition is always sold out…

• Our rates in morning and afternoon drive are FANTASTIC, and we still have tons of inventory left to sell…

Inventory Behaving Badly

• My drive time inventory is sold out, but I’ve got tons in midday, evenings and weekends…

• There are certain shows on the weekend where inventory always seems to be sold out, like Car Talk, but nobody seems to want to buy the other programs…

• We are sold out for the next six weeks…

Inventory Behaving Badly

• I’m only selling about 60% of my stations drive times, and only 25% of all the other dayparts…

• I’m doing a great job selling out my stations inventory, but I still haven’t made budget. I need more inventory…!

• So what’s the point ?

Question:IS YOUR INVENTORY A DIRECT REFLECTION OF HOW YOU ARE

SELLING UNDERWRITING?

Inventory Management Path

1. Set Up Reports

2. Look for Stories

3. Create a Sales Strategy

4. Monitor Sales Behavior

5. Evaluate Results

Traffic Report Set-Up

• Avails Report

• Average Unit Rate report

• Billing History - Scheduled

• Billing Projection – Contracted

• Category Report – Conflict Codes

• Aged Receivables

Look For Stories

• The obvious:

– Tons of inventory?

– Disproportionate use of drive times?

– Weak selling periods?

– Sold out for next 8 weeks?

– Some weekend shows sold out?

– Selling Morning Edition as daypart?

• Not so Obvious:

– Rate averaging over schedule?

– Soft major categories?

– Categories our revenue comes from?

– Too much billing from too few accounts?

– Too many small underwriters?

– Not attaching revenue to inventory?

Create A Sales Strategy

Four Guiding Principles

1. Grid Theory

2. Locomotive Theory

3. Belief System

4. Pricing Philosophy

What’s Your Total Inventory CapacityWeekly Annual Revenue

Mon-Fri Inv Inv Rate Potential5am-10am 0 - 0 - 10am-3pm 0 - 0 - 3pm-7pm 0 - 0 - 7pm-Mid 0 - 0 - Mid-5am 0 - 0 -

Totals -

Weekends6am-10am 0 - 0 - 10am-3pm 0 - 0 - 3pm-7pm 0 - 0 - 7pm-Mid 0 - 0 - Mid-5am 0 - 0 -

Totals -

Total Potential Revenue -

What’s Your Total Inventory CapacityWeekly Annual Revenue

Mon-Fri Inv Inv Rate Potential5am-10am 125 6,500 0 - 10am-3pm 125 6,500 0 - 3pm-7pm 100 5,200 0 - 7pm-Mid 80 4,160 0 - Mid-5am 85 4,420 0 -

Totals -

Weekends6am-10am 40 2,080 0 - 10am-3pm 40 2,080 0 - 3pm-7pm 32 1,664 0 - 7pm-Mid 40 2,080 0 - Mid-5am 30 1,560 0 -

Totals -

Total Potential Revenue -

What’s Your Total Inventory CapacityWeekly Annual Revenue

Mon-Fri Inv Inv Rate Potential5am-10am 125 6,500 150 975,000 10am-3pm 125 6,500 100 650,000 3pm-7pm 100 5,200 125 650,000 7pm-Mid 80 4,160 50 208,000 Mid-5am 85 4,420 5 22,100

Totals 2,505,100

Weekends6am-10am 40 2,080 125 260,000 10am-3pm 40 2,080 125 260,000 3pm-7pm 32 1,664 125 208,000 7pm-Mid 40 2,080 50 104,000 Mid-5am 30 1,560 5 7,800

Totals 839,800

Total Potential Revenue 3,344,900

Pricing Philosophy

• Rate Card

• Rate Card Guidelines

• Standard Packages

Create a Sales Strategy

Three Common Themes

1. Tons of extra inventory - December & January

2. Business soft during Summer

3. Disproportionate use of drive times

Strategy Number One

Situation: lack of demand Dec/Jan

Solution:“Thank You”• December 5 - Research inventory• Available late December – Early January• Sales offering• Prior year underwriters only• Make it physical • Track daily

Strategy Number Two

Situation: Soft Summer – Rep Introduction

Solution: Summer offering

• Tiered discounts

• Plans limited to 13 weeks

• Provided incentives

Strategy Number Three

Situation: buying only Morning Edition

Solution: Retailers Kit

Four marketing legs

1. Web page

2. Station promos

3. Underwriting credits

4. Static window sticker

Only A Fully Developed Strategy Can Be Evaluated

Monitor Sales Behavior

• Weekly Behavior– Order Entry

• Schedule inventory expectations• Rates assigned to inventory• Rate alignment with expected standards• Proper coding

– Presentations• Amount of ask (share or rate)• Negotiation outside of standards• Pending Business

Monitor Sales Behavior

• Monthly Behavior– Projections– Pacing – Average unit rate by daypart– Percent of inventory sold by daypart– Expected growth by rep experience

• Entry level• Experienced • Seasoned

Evaluate Results

• Based on your sales strategy– Met or exceed budget expectations

• Collections pacing with revenue• Average AR report

– Increase sell of spread– +/- AUR– Increase unit count per month– Average spending by account– Revenue growth by rep

Added Value

Let you pricing structure work for you

• Specific program purchase

• Long term discounts

• Contract length

• Non-profit rate

• Priority codes

• Packages promote rate or spread

• Exceptions