Why Partner Management and Yield Management Need to be BFFs
Once upon a time, media companies had a pretty clear idea of who their audiences were and where they could be found, which helped them advise advertisers on the right programming and day-parting to purchase for their ads.
But the long march to digital TV has upended life for content-originator brands (aka television broadcast companies). Although viewers still watch as much TV as ever, fewer sit down in front of traditional sets to tune in, and that puts them in the control seat. If brand loyalty was hard to achieve when viewers could switch between a handful a channels, it’s become pretty near impossible now that they have a myriad of options at their disposal.
Increasingly, the group with the most real influence over your audiences just may be your partner-management team. Savvy media companies have already elevated these groups to the senior levels, and that’s a pretty good start, but it’s not enough. Individual partner managers need to learn the ins and outs of yield optimization, or at least become BFFs with the analysts on the yield optimization team.
Partner Management As Yield Optimizers (and Vice Versa)
Partner management groups were once a mid-tier function within the media organization, providing important, but hardly mission-critical, services. And in the old world, programmers (those who picked the shows) held all the power, and they strategically picked programming adjacencies to maximize affinity and extend viewing. That’s a lot less relevant now in our era of playlists, video-on-demand, recommendation engines, as well as new content distributors such as Amazon, Hulu, Netflix, YouTube and the myriad OTT and MVPD players. IMHO, the syndication teams are the new goods.
And this, in turn, means media companies have lost a major knob in their arsenals, and must depend on their partners for driving audiences to their content. How significant is this trend? Eyeballs have a direct correlation to revenue: the bigger the audience, the more the media company can charge for advertising.
Let’s say you’ve struck a partnership with a content distributor and have agreed to a certain level of traffic. Can you expect to see that volume of traffic for the course of your partnership? And, can you rely on your yield optimization team to determine the best ways to optimize revenue generated on your partners’ channels?
I would argue no media CMO can make either of those assumptions anymore.
To begin, partner traffic can fluctuate fairly significantly, depending on what your partners are doing with their multiple content partners. Hulu may decide to promote another network’s content over yours for its own business reasons (for instance, marketers there may believe that the other show is a true breakout show they can use to increase their own audience). These types of events have huge implications for your advertising revenue. If traffic suddenly plunges – or even dips modestly – it’s your partner-management team who will need to step in.
But here’s where it gets complicated: Should they pull out all stops? Or are the other, more strategic partners the ones to prioritize? For media companies wholly dependent on advertising, the answer depends on knowing which partner delivers the most advertising revenue for each program on a 24-hour cycle. This isn’t data that partner management teams can easily put their fingers on, and even if they could, would they be motivated to emphasize one partnership over the other if it puts individual commissions at risk?
Meanwhile, the yield optimization team may see other issues that may affect the bottom line – a hot program is receiving low CPMs because it’s categorized incorrectly – and they’ll need the ability to address it. Ask yourself: Does your company give this team the ability to raise the flag? Do they know the name and telephone number of the employee who manages that partnership? And does that partner manager understand that he or she must take the call from that yield optimizer?
Other issues: Yield Ops already has capacity-forecasting challenges on your relatively stable owned property. On partner properties, it’s even more confusing. For example, it was once a best practice to use past delivery patterns to forecast the future. But if traffic is up or down due to decisions on the partner end, should you forecast that or should you forecast what should have happened?
And how do advertising creatives perform in different environments, and how does that translate into renewals or cancellations (or just re-allocations)? What is the value of YOUR content in a partner environment? To get a read on this, first you need overlay audience data with delivery data, and then you need to make some strategic decisions on what the data tells you and how you want to react.
Media companies have done a good job in adjusting to the whole TV-anywhere thing. They ceased to fight the trend, and are loosening up restrictions on when, how and where people can consume their content. But that’s just the beginning. The partner management and yield optimization functions must build real partnerships if content-originator brands are to thrive. That will require new workflows, new skillsets, and real-time reporting for partner management. And it will require that yield managers get outside of the real time, and think more long term.