Forecasting ad revenues Brands, Media and Money I have been involved in several TV airtime revenue forecasting projects – here are two: UK TV revenue The first example is work for ISBA in 2000 which econometrically modeled the supply and demand for target subgroups as separate markets. The reasoning being that the arrival of significant new advertisers meant conventional approaches - which treated TV as an aggregate market - would lack explanatory power if not accuracy. One scenario tested was “what would happen if the BBC ran 7 minute ad breaks surrounding the 9pm News ?” – a heretical thought for some, but one which advertisers were curious about at the time. The conclusions were: - It would yield c. £200m for the BBC - It would not reduce incumbent broadcasters’ real income - It would reduce average airtime costs by c. 4.5% US TV pricing The second piece of work dates from 2002 when I created a a US TV market price forecasting model. The aim was to provide buyers with some insight before the notorious upfront negotiations. The approach was simple in concept: estimate demand and divide it into supply of available ad inventory (by daypart). Demand was estimated “bottom up” via a series of category specific econometric models – all of which reacted differently to changing macro economic conditions. Supply was highly predictable in aggregate. The result was an interactive tool that could give an instant picture of likely upfront and spot prices by daypart. : Forecasting US TV prices <<<< Back to menu