“Traffic” or “Revenue Management” – What Is Traffic?

Has “Traffic” truly become an outdated term? While handling revenues generated by accurate, timely sales and inventory management is a key function of Traffic, does that mean that the term “Revenue Management” is a better description of the work done by the Traffic department? 

Today’s Broadcasters are undergoing massive changes in information technology that allow them to evolve beyond TV and radio into multiplatform media enterprises. This, in turn, is redefining how traffic departments contribute to the success of their stations, and reinforces the role that traffic directors play in key functions, beyond managing revenue. While managing revenue remains vital, the role of Traffic has a much broader impact on the success of today’s broadcaster.

Understanding where traffic systems are headed begins with understanding the place that they have always held – in the heart of any broadcast operation. Traffic is the central hub connecting sales and billing to programming and playout. As the name suggests, Traffic controls the stop and go of every element in a station, station group or network. It’s as crucial as the stoplights regulating the flow of cars and pedestrians through crowded intersections during rush hour.

In terms of information management, Traffic is where all the separate processes involved in station management come together. That’s why the term “Traffic” is even more relevant today, as Information Technology becomes the foundation for broadcasting systems. Traffic is the all-important go-between, drawing together separate parts to create a greater whole.

How important is Traffic’s role in processing and coordinating all the information it connects? Ultimately, the organization’s efficiency and economy is determined by how well traffic information is managed. In other words, Traffic is the key to optimizing the broadcaster’s workflow. An efficient workflow is a critical component in effective revenue management.

Why? Because the broadcast operation’s overall productivity is tied to Traffic, revenues can go up or down depending on savings or inefficiencies generated here. An efficient combination of Traffic personnel and Traffic software system cuts costs in terms of hours spent doing the job. Conversely, an ineffective traffic staff and system results in losses across the organization. For example, poor inventory control can result in lost revenue or lost sales opportunities - a direct impact on the bottom line. 

To understand evolving directions for traffic systems, we need to appreciate what’s going on in the broadcast business. Veterans of the business can remember when information from sales, billing and programming was pulled together manually. Because of outdated systems and high profits, the business could stand the increased overhead of doing things by hand. However, those days are long gone. Now, computerized systems and the efficiency and accuracy they bring are the keys to profitability. Given the changes in the broadcast industry, these systems aren’t just about profitability – they’re about viability. 

How’s that? Traffic systems are the hope for the future of the broadcast industry. That’s clear when you look at the “big picture” of what’s going on in the industry. Traditionally, the broadcast business has been about enormous investments in infrastructure – station licenses, transmitters, buildings, and programming / production costs plus large staffs to run the show. High entry costs kept small players out of the game. Now, the rise of the Internet and New Media has cut entry costs so that hobbyists can grab eyes and ears for next to nothing. Taken individually, these don’t add up to much. YouTube, online music sites and the rest have been constantly chipping away at audiences – and revenues. How can broadcasters compete against this? 

Now, let’s see how traffic systems open the opportunity for broadcasters to thrive in this new era by opening the door to multiplatform media distribution. 

The Multiplatform Future

The broadcast industry is facing tough times. Multitudes of small-time “micro media” players are stealing eyes and ears with viewers watching clips on YouTube or listening to music on iPods. Some say that broadcasting can’t fight this death of a thousand cuts bleeding off the huge audiences that TV and radio once delivered.

What’s the hope for the future of the business? Advances in traffic software open up opportunities for broadcasters to capture new audiences, influence and revenues. To take advantage of this, traffic directors are appreciating the central role their work plays in going from traditional broadcast to multiplatform media delivery.

Veteran traffic personnel are already well aware of the first phases in the changeover. The arrival of computerized traffic systems quickly outdated the old ways of working. The first generation of this technology still follows the workflow of the traditional business model where the traffic system operates separately from other systems in other departments. These different pieces are woven together by hand.

One way to analyze a station’s efficiency is to look at how much manual intervention takes place pulling this all together. In bringing together sales, billing, programming and the rest, how many times does staff have to re-enter data, compare different printouts, and double-check for mistakes to fit the pieces together? The limitations of needing a lot of hands-on work are obvious. This doesn’t scale well and leaves little time for anything else. Want to add another content stream customized for another platform with different ads targeting that audience? You must plan on adding an entire new operation. This is why broadcasters are having such a hard time competing with the New Media upstarts.

IT-based broadcast infrastructure is already helping to make traditional broadcast operations more efficient. The next phase is to use the technology to go after new opportunities. The future belongs to media enterprises that can get content to people whenever, wherever and however they want it. Traffic systems are at the core of larger unified management systems that seamlessly weave together the different strands of programming, advertising, promotions and billing. With this type of fully integrated approach, all systems share information so there’s no unnecessary data entry, manual intervention or need to validate data from different systems.

This is a step that mainstream business took a long time ago. Back in the 80’s, personal computers had DOS-based standalone spreadsheets, word processors and databases that all had different commands. It was a major leap ahead for business to move to unified office suites with Windows’ common interface and commands, but one that has allowed even the smallest business to operate like a large one. That same evolution is happening as broadcast systems merge together their different broadcast applications. 

For today’s traffic manager using such a system there are many opportunities. Suddenly, staff can easily manage multiple streams across multiple platforms. Web sites, VOD, cell phones and soon, Mobile DTV can take the same core content and repurpose it for the target market – inserting advertising and promotions for that specific niche market. The investment in content gets greater returns by offering programming, wherever and whenever people want it. The brands built around stations provide a natural home team advantage in growing new media platforms and holding back the upstarts. This advantage will soon fade if station branding and advertising can’t be carried across multiple platforms. 

Therefore, the key is for traffic managers to think enterprise-wide. Yes, see how systems that share information enterprise-wide add efficiencies. Perhaps, more importantly for the long term, see how they open a new successful chapter for broadcasting – and for information-savvy traffic professionals. 

With all of this in mind, we’ll be joining the artisans of Revenue Management (the members of the Traffic Director’s Guild of America) and many of our colleagues in the Traffic Software industry for the unveiling of selected chapters from the new publication entitled “Traffic 101,” a completely re-written text for those that are brand new to our unique profession as well as the experienced Traffic personnel that have so creatively moved our craft to its respected professional status. You’ll hear much more about “Traffic 101 in the weeks to come here on TDGA’s website. The new publication is projected for an early release in January of 2010 for TDGA Members.